Portfolio | September 2014

Portfolio

Issue 105 ■ September 2014

Exclusive to Emirates First Class and Business Class

TECH TITANS Europe’s Online Love Affair RETAIL DRIVE Africa’s Big Spenders CASHEW APPLES A Juicy Business

Reed Hastings The Netflix Innovator

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chaumet.com

“Double take” by Marine Vacth

Joséphine Rings

This issue SEPTEMBER 2014

Portfolio

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Exclusive to Emirates First Class and Business Class

Cover Story 30 The On-demand Content Master Reed Hastings, like all good tech gurus, has taken a simple idea and made it into a thriving business. Through its on-demand video streaming and original content, Netflix has altered the media landscape forever.

Features 36 Expanding Middle Class Fuels Growth

54 Hong Kong’s Rich Resist Market Forces

Consumer demand – not cyclical commodity prices – is

The superluxury real estate market is holding its own even as

fuelling development and economic expansion in sub-

property prices in the lower-tier sectors dip.

Saharan Africa.

58 Growing Shrimp in a Barrel

42 Europe’s Love of US Tech Titans

New aquaculture methods are being tested as demand and

Despite worrying about their privacy, Europeans are heavy users of Facebook, Google and Amazon.

prices for shrimp rise and natural stocks decline.

54

48 Streamlining the Auto-Rickshaw Business Indian startups are using programs with algorithms to connect auto-rickshaw drivers with customers.

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42

48

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Exclusive to Emirates First Class and Business Class

Essentials 63 Ship Shape Oslo Norway has a proud tradition of exploration and seafaring, nowhere better on display than in Oslo’s outstanding maritime museums.

68 Detroit Love, Swedish Style The Big Power Meet, a huge classic-car gathering, clearly illustrates the Swedish love affair with old American cars.

63

72 The Great War’s Reminders It has been 100 years since World War I erupted, but around Ypres in Belgium the earth is releasing constant reminders.

76 Apple of Pepsi’s Eye The juice extracted from cashew apples could be the next coconut water if Pepsi has its way.

80 Keeping a Historic Ship Afloat

68

The SS United States, which set the record for an eastbound crossing of the Atlantic in 1952, is likely to be scrapped if plans for its redevelopment fail.

84 Stepping Into the Frame L’Estaque, which used to be a small fishing village close to Marseille, inspired painters such as Paul Cézanne, Georges Braque and Pierre-Auguste Renoir.

88 Other Business

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

Departments 13 Notebook World business in a nutshell.

21 Observer Spotting and analysing business trends.

28 Column: Claire Cain Miller Women on the Board

Published for Emirates by

Media One Towers, Dubai Media City, PO Box 2331, Dubai, UAE. Telephone: (+971 4) 4273000 e-mail: emirates@motivate.ae

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Editor-in-Chief Obaid Humaid Al Tayer Managing Partner & Group Editor Ian Fairservice Editorial Director Gina Johnson Group Editor Guido Duken Junior Writer Mary Sophia Picture Researcher Hilda D’Souza Editorial Assistant Londresa Flores Senior Art Director Tarak Parekh Senior Designer Charlie Banalo Head of Production S Sunil Kumar Senior Production Manager C Sudhakar Group Sales Manager Jaya Balakrishnan Email: jaya@motivate.ae General Manager – Group Sales Anthony Milne Email: anthony@motivate.ae Sales Manager Melroy Noronha Email: melroy@motivate.ae

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Emirates takes care to ensure that all facts published herein are correct. In the event of any inaccuracy, please contact The Editor. Any opinion expressed is the honest belief of the author based on all available facts. Comments and facts should not be relied upon by the reader in taking commercial, legal, financial or other decisions. Articles are by their nature general, and specialist advice should always be consulted before any actions are taken.

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13

getty images

BUSINESS NEWS IN BRIEF

Malaysia Woos Mothers In a Diversity in the Workplace survey

The Malaysian governMenT is

about two-thirds of women citing

taking steps to entice mothers back into

family as the main reason for leaving

last year of 122 publicly-traded Malaysian

the labour market. The country currently

the workforce, alleviating child-care

companies, only six per cent had child-

has Southeast Asia’s lowest female

strains will support Najib’s efforts to spur

care centres, while less than a fifth

workforce participation rate.

economic growth and become a high-

provided mothers’ rooms.

The government is collaborating with companies to increase child-care

income nation by 2020.

According to data compiled by the

About a third of companies offered some sort of flexible work arrangements,

facilities according to Rohani Abdul

World Bank, about 46.8 per cent of

according to the report commissioned by

Karim, Minister for Women, Family and

Malaysia’s women aged 15 to 64

TalentCorp, a government agency tasked

Community Development. The ministry

were employed in 2012, the lowest

with attracting and fostering talent to

is working with companies including

rate in Southeast Asia. That compares

meet the needs of businesses.

Citigroup and General Electric to raise

with 78.6 per cent in Vietnam, 70.8

the female participation rate to 55 per

per cent in Thailand, 65.1 per cent in

per cent of public university enrolment in

cent by 2015 from 52.4 per cent now,

Singapore and 53.4 per cent in Indonesia,

the 2013/2014 academic year, according

she said.

the data showed.

to government figures, underscoring the

Prime Minister Najib Razak has

Attaining a higher female participation

Malaysia’s women accounted for 68

need to keep them in the workforce. The

offered tax incentives to companies that

rate could provide Malaysia with a

loss of women in the workplace has also

establish nurseries and allow flexible

“growth dividend” of about 0.4 percentage

led to an imbalance in the workforce,

work arrangements to encourage more

points a year, according to a 2012 World

with women holding just seven per cent

women to resume their careers. With

Bank study.

of board seats of listed companies. n

September 2014

Notebook Numbers Game

Climate Change Threatens South Asia The economies of South Asia could lose almost a quarter of their gross domestic product annually by the end of the century should they fail to

$4

fight climate change.

million was a fetching

India, Nepal, Bangladesh,

price earned for a

bed that hasn’t been made

Bhutan, Sri Lanka and the

for 16 years at the Christie’s

Maldives are more at risk than

art auction in London recently. artist Tracey Emin call it “My Bed” because it was the bed where she spent four days in 1998 “heartbroken and feeling terrible,” she told CNN.

any other region to natural

$2.8

billion donation pledged by Warren Buffet outdid his own personal philanthropy record yet again.

Last year he signed off a $2.6 billion donation in his annual giving pledge. His personal fortune decreased from $65 billion to $63.1 billion, causing him to drop to fourth spot on Forbes’ list of world’s richest people.

disasters, rising sea levels and disruptive seasonal patterns, the Asian Development Bank said in a report this week.

Warmer temperatures could reduce rice production in India

99.96

per cent of light

striking the newly engineered Vantablack material gets

The World

55 per cent stake will earn US

and Bangladesh. Rising ocean

retailer Walgreens complete

levels may swallow as much as

In Figures

sway over British chemist

90 per cent of the Maldives and

alliance Boots to form a new

inundate cities such as Dhaka

group, Walgreen Boots alliance.

and Mumbai. Water demand

absorbed by it, making it the world’s darkest material ever

ever driver. The Toro Rosso

Walgreens trades from more

in India may outstrip supply

tested. Conventional black,

team revealed he will replace

than 8,500 locations across the

by more than 40 per cent,

such as black paint or fabric,

Frenchman Jean-Eric Vergne

US, while alliance Boots has

according to the report.

absorbs between 95 to 98 per

next year. The sports youngest

2,500 stores and 75,000 staff in

cent of light. Military clients and

driver to date is Spaniard Jaime

the UK.

makers of air-borne cameras,

alguersuari, who made his debut

Manila-based lender don’t

telescopes, infrared scanning

with the same Red Bull-owned

include extreme events such as

systems and space industry are

team in 2009 at the age of 19.

storms, floods, and droughts.

The potential economic losses calculated by the

lining up to buy it.

1.2

billion internet user names and passwords

have been stolen by a Russian crime ring, amassing what could be the largest collection of stolen digital credentials in history says the New York Times. Websites

16

become Formula One’s youngest

billion kilometre journey was accomplished by

Europe’s Rosetta spacecraft in

hacked ranged from Fortune 500

the decade it travelled to comet

companies to very small websites.

67P. The mission will help unlock some of the secrets of the solar

-year-old Max Verstappen is set to

6.4

£9

billion cash and shares

system, including how water got

deal for the outstanding

to planet earth.

GETTY IMaGES

14

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Notebook

16

Monaco Real estate BooM

hiding assets will also probably attract the affluent to Monaco. One in three of Monaco’s 38,000 residents are millionaires, according to a study by Spear’s magazine and WealthInsight. As that number increases, home values will rise by about a fifth by June 2015, according to Londonbased Savills.

The most expensive part of Monaco, centred on the Golden Square and The Casino de Monte-Carlo, is already the world’s costliest property location ahead of Hong Kong. For $1 million, you could buy about 15 square metres of space.

While Switzerland also has some of

getty images

Europe’s lowest tax rates, it’s becoming less attractive to luxury homebuyers as the country’s financial secrecy laws are eroded Monaco is experiencing a luxury-housing boom that includes the world’s most

don’t pay taxes on income.

A “flow” of new residents is emigrating

amid a move toward a global standard of information exchange between tax authorities.

Asking prices for luxury homes in Geneva

expensive penthouse as developers prepare

from Switzerland, where financial-secrecy

for an influx of millionaires and billionaires

laws are crumbling. The Swiss government

have fallen by an average of about 30 per

escaping higher taxes or a loss of banking

signed an accord in May to automatically

cent in the last 12 months and values have

privacy. The principality’s residents,

share bank data across borders.

dropped by as much as six per cent. Central

who include Russian billionaire Dmitry Rybolovlev and pop singer Shirley Bassey,

New levies on luxury homes in London and a US-led global crackdown on

London’s luxury-home market has also shown signs of cooling amid new taxes.

South Africa May Export Rhinos

with a record 1,004 in all of last year.

The South African cabinet has approved

game reserves and private game ranches as

the relocation of rhinos from the country’s

Affairs Minister Edna Molewa.

The country, home to most of the world’s

Poaching has surged in South African demand for the animals’ horns climbs in

Kruger National Park to secret sites both

rhinos, is struggling to protect the animals

Asian nations because of a false belief that

within the nation and across its borders to

against poachers. So far this year 638

they can cure diseases including cancer.

combat a surge in poaching.

rhinos have been poached in South Africa,

Discussions with Botswana and Zambia have started, according to Environmental

The latest rhino-population survey, in

almost two thirds of those in Kruger, a

2013, showed that between 8,400 and

reserve the size of Switzerland, compared

9,600 white rhinos are presently living in Kruger National Park. Poaching, natural deaths and the translocation of rhino from the Kruger National Park presently match that of rhino births.

Most rhinos in South Africa are white rhinos, the bigger of the two types of the animal found in Africa. They can weigh more than two tons. Their horns, and those

getty images

of the smaller black rhino as well as Asian varieties, are more valuable than gold by weight. The horns are largely made up of keratin, a substance similar to human hair.

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Notebook DUBAI EVENT: RTEX 2014 WEBSITE: RT-EXHIBITION.COM DATE: SEPTEMBER 28-30 VENUE: THE MEYDAN HOTEL RTEX 2014 is the first ever Robotics and Automation Exhibition to be held in the MENA region. The theme revolves around the idea that robot technology can provide a smarter and more sustainable life for human kind with the focus on town automation including smart city concepts, logistics, unmanned systems and healthcare robotics. It will offer a unique platform for exhibitors to display the latest innovations and for visitors to gain hands on experience with robotics and automation.

EVENT: SMART LIVING CITY WEBSITE: SMARTLIVINGCITY.COM DATE: SEPTEMBER 15-16 VENUE: JUMEIRAH EMIRATES TOWERS This biannual gathering will draw city planners, government representatives and world-class experts to share ideas in making cities more liveable and sustainable.

The event will focus on the latest in technology and practices and work to integrate these innovations into all services including real estate development, infrastructure, transport and communications. Over the two days there will be keynote addresses, panel discussions and competitions.

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EVENT: CITYSCAPE GLOBAL WEBSITE: CITYSCAPEGLOBAL.COM DATE: SEPTEMBER 21-23 VENUE: WORLD TRADE CENTRE The region’s biggest real estate gathering brings together key real estate investors, developers, architects and designers under one roof. This year will mark an increase of 25 per cent on last year with more than 250 international and regional exhibitors participating.

Cityscape will expand its exhibition arena to accommodate the increased participation.

There will also be three dedicated conferences held alongside: The Global Real Estate Summit, Future Cities and Real Estate Brokers Summit.

EVENT: PAPER ARABIA 2014 WEBISTE: PAPERARABIA.COM DATE: SEPTEMBER 21-23 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE Paper Arabia is a prime meeting place for professionals and exporters from the paper industries. New technology and trends will be unveiled at the event with this edition highlighting the latest developments in the corrugated packaging and carton industry.

The event will also target the green consumer through a series of packaging methods and material that are eco-friendly, sustainable and biodegradable. Last year the exhibition witnessed more than 6,500 trade visitors from 48 countries of which 96 per cent were senior ranking executives.

EVENT: GITEX SHOPPER 2014 WEBSITE: GITEXSHOPPERDUBAI.COM DATE: SEPTEMBER 27 – OCTOBER 4 VENUE: DUBAI WORLD TRADE CENTRE The eight-day shopping extravaganza will have exhibiting companies showing the latest in electronic products and services with a focus on mobile and home entertainment technology. The weeklong event schedule includes new launches, live demonstrations, lucky draws, launch offers, free to attend seminars, free workshops and conferences.

Last year the event drew 210,324 visitors and raked in sales worth 245 million dirhams.

Portfolio

Observer

21

BUSINESS NEWS IN BRIEF

China Sees a Recovery, on Paper Although China’s economic growth climbed 7.5 per cent in the second quarter, it appears that sales and confidence are eroding in many sectors, reports Keith Bradsher.

construction and other investment in the private sector – is sputtering, while exports have only begun to recover from a weak winter and retail sales growth is levelling off. That leaves government investment and spending, which are running strong.

They are propelled by redoubled lending

Ou Chengbi, a butCher at a

growth climbed 7.5 per cent in the second

this spring by the state-controlled banking

sweltering open-air market on the outskirts

quarter, compared with a year earlier. But

system to the national railroad system, local

of Guangzhou in southeastern China, can

independent surveys of businesses across

governments and state-owned enterprises.

scarcely see signs of recovery in her country’s

China show that in sector after sector, sales

economy. Dripping with perspiration near

and confidence are still deteriorating.

© 2014 New York Times News service

slabs of beef in her stall, she described how as

“All of them are pointing in the opposite

The result has been frenzied spending on the construction of railroad lines – up 32.1 per cent in June from a year earlier – and

recently as last winter she could still chop up

direction from this supposed GDP

subsidised housing. Steel output in China

an entire cow each day and sell it all. “Now I

number,” said Leland Miller, the president

is setting records by tonnage as a result,

can only sell half a cow a day,” she said.

of China Beige Book International, a

even as the number of housing starts in the

New York data service that surveys 2,200

private sector is falling steeply.

Millions of Chinese merchants like Ou seem to be struggling, even as data suggests

private businesses across China each

growth is stabilising.

quarter to gauge economic activity.

The National Bureau of Statistics in Beijing announced in July that economic September 2014

One of the biggest engines of Chinese economic growth in recent years –

Total lending has now risen faster than economic output, even before adjusting for inflation, in every quarter since late 2011. Lending accelerated further in June,

22

Observer ”Generally speaking, comparing recent months to the same period last year, business has been very slow and very quiet.“

debt capacity, I believe that current rates of

than it did a year ago. He and a co-worker

credit expansion can continue at most for

each earned 50 renminbi ($8.10) for more

another three to four years,” Michael Pettis,

than two hours of unloading the truck;

a finance professor at Peking University’s

they earned 40 renminbi for the same job a

Guanghua School of Management, wrote

year ago, Xu said. “Who is willing to do this

in his newsletter after the release of the

anymore?” he added.

economic data.

Yet China’s economic outlook retains

Consumer retail sales are also growing strongly, up 12.4 per cent in June from a year

pockets of long-term strength. One of them

earlier, according to government figures. That

according to figures released in July by the

is that tens of millions of Chinese workers

nearly matches a pace of 12.5 per cent in May.

central bank, the People’s Bank of China.

have more money to spend each year. The

Yet Miller’s survey and others show that

July data showed that average wages for

the effects on the economy of a deceleration

private businesses are becoming less and less

migrant workers were up 10.6 per cent this

in private-sector investment, including a

interested in borrowing money because they

summer from a year ago. That was nearly

14 per cent drop in housing starts in June

see few opportunities to invest it profitably.

five times the increase in consumer prices

compared with a year earlier. Prices for new

over the last year, at just 2.3 per cent.

apartments have dropped in some cities, and

“We have not felt any improvement in our business since the beginning of the

Though migrants often have less than

But that has not been fast enough to offset

the number of transactions has slumped.

Most economists say Chinese households

year,” said Wan Yanhong, the business

a high school degree, they have fared

manager at the Nanchang Zerowatt

better than more educated young people

have the financial strength to step up

Electric Appliance Company in Nanchang,

in China’s job market in recent years, as

spending faster than their incomes by

in south-central China.

a quintupling in the number of college

reducing their prodigious savings rates.

graduates has produced a glut in a country

But for revenue, the Chinese government

months to the same period last year, business

still heavily reliant on blue-collar sectors like

relies heavily on steep value-added taxes

has been very slow and very quiet,” said Kay

construction and manufacturing.

that penalise consumption, while a faltering

“Generally speaking, comparing recent

Lam, the manager of UB Office Systems, an office furniture store in Guangzhou.

Xu Hua, a greying, unshaven man wearing shorts and no shirt, strained to carry a

housing market has damaged confidence.

“There are fewer people even coming in to

succession of enormous white sacks of

look,” said Deng Weiping, a wholesaler at a

rebalancing the economy, encouraging more

rice from a delivery van into a Guangzhou

fabric market in Guangzhou. “And the people

spending by households, which save nearly

restaurant. But he said the task paid better

who do come in buy less than before.” n

Chinese officials have repeatedly called for

half their incomes, and less dependence on debt-financed investment projects. But each time growth starts to fall below the official target of roughly 7.5 per cent – as it did in the first quarter, when it was 7.4 per cent – the government quickly opens the spigots for further credit.

Some economists inside and outside the government contend that China has a choice: slow down the lending and accept steady declines in economic growth each year, or continue heavy lending and risk a sharp drop in economic growth someday when the financial system begins to teeter. But nobody knows when that might happen.

“Although there is no way to predict with accuracy and certainty the point at which China will reach the limits of its

The open-air Jiahe Market in Guangzhou, China.

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

Dave Lewis Tesco Plc., the British multinational grocery and general merchandise retailer has chosen Dave Lewis to be its chief executive officer, effective October 1. Lewis takes over the leadership from Philip Clarke, who will step down from the post but stay on at the company to support the transition until January 2015.

The switch comes as Tesco battles to boost slumping sales in the face of UK’s changing retail environment. Tesco has lost market share with a large-scale consumer preference shifting away from megastores to discounters, luxury supermarket chains and online shopping.

Discount chains including German stores Aldi and Lidl are offering commodities at low prices, forcing big supermarket chains in the UK, including Tesco, to reduce its prices in a bid to retain its customers. On the other hand, upmarket grocers such as Waitrose and Marks & Spencer are contesting the threat from the discount quarter by offering consumers unique treats such free coffee, setting up wine tasting areas and also enhancing the product range under their own brand to draw more customers.

The appointment of Lewis seems to have slightly shored up the dwindling faith of stockholders, especially after Tesco posted its worst quarter in 40 years this July. The share price rallied three per cent on the news of the appointment. Investors hope Lewis’ business acumen and market knowledge that he showed at Unilever, his previous appointment, will help turn business around at Tesco.

Lewis, 48, worked for over 27-years at Unilever. He started out as a trainee from Trent Polytechnic in 1987 and worked his way up to become a global president of Unilever’s personal care division and chairman of the UK and Ireland businesses.

Lewis will be the first Tesco chief executive to be appointed from outside in the company’s 95-year history. The main challenges facing Lewis will be restoring customers perceptions of the brand and meeting the stiff competition from discounters, upmarket stores and online providers.

Sir Richard Broadbent, the chairman of Tesco, has expressed his confidence in the new chief saying that Lewis has a wealth of international consumer skills in shaping business strategies, marketing, and branding.

Analysts believe that it is Lewis’ know-how of branding that appealed to Tesco. At Unilever he took on responsibility for household names including Vaseline, Lynx and Lifebuoy soap.

His vast experience at Unilever would work to his advantage in negotiating with major suppliers, getting better prices and shaping a business model more suitable for an increasingly digital future.

Oil Shielded from Disruptions Global political tensions normally means the oil price rises, especially when there is fighting in oil producing countries such as Iraq and Libya. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear programme and the world economy had just seen the strongest period of sustained growth since the 1970s. Today, the price of crude is dropping.

What’s changed is the shale fracking boom. The US is pumping the most oil in 27 years, adding more than three million barrels of daily supply since 2008. The International Energy Agency said that a supply glut is shielding the market from disruptions, a view shared by Bank of America, Citigroup and BNP Paribas.

The US imported 7.17 million barrels a day of crude in May, a 26 per cent drop from the same month in 2008, according to data compiled by the Energy Information Administration.

Foreign deliveries will meet 22 per cent of US demand next year, the lowest level since 1970, the agency said. The nation’s output is forecast to climb to 9.28 million barrels a day next year, the highest level since 1972, the EIA said.

Global oil demand grew last quarter at the weakest pace since 2012, helping to calm world markets amid conflicts in the Middle East and North Africa, the IEA said in its report.

The agency cut estimates for total growth in 2014 by 180,000 barrels a day.

getty images

24

Portfolio

Observer

25

The looming shortage shows the rapid expansion of solar energy. The industry may install as much as 52 gigawatts this year and 61 gigawatts in 2015. That’s up from 40 gigawatts in 2013, and more than seven times what developers demanded five years ago, according to Bloomberg New Energy Finance.

The industry has about 70 gigawatts of production capacity, New Energy Finance estimates, including a significant amount of older equipment that’s not profitable. getty iMAges

The last time supplies were hard to find was in 2006, when the nascent industry installed just 1.5 gigawatts of

Solar Panel Shortage Ahead

capacity. The following year, the top

The solar industry is facing a looming

expected to swell as much as 29 per cent

$5 billion of shares from 2005 to 2010,

shortage of photovoltaic panels, reversing a

this year, executives are bracing for the first

and wrested control of the market from

two-year slump triggered by a global glut.

shortfall since 2006.

companies in the US, Germany and Japan.

The oversupply pushed prices through

Scarcity will benefit the biggest

Chinese manufacturers raised $1.8 billion selling stock to Wall Street to finance new production capacity.

Chinese manufacturers sold about

The added capacity drove down prices

the floor, making solar power more

manufacturers, including China’s Yingli

and pushed dozens of manufacturers into

competitive and driving up demand. It

Green Energy Holdings and Trina Solar. A

bankruptcy. Solar panels sell for 76 cents a

also dragged dozens of manufacturers into

shortage may slow development outside the

watt now, compared with $2.01 at the end

bankruptcy, and slowed capital investment

top markets in Asia and North America if

of 2010. The price has slipped 12 per cent

at the survivors. With installations

suppliers favour their largest customers.

this year.

Uber’s German Setbacks Uber Technologies, maker of the ride-

taxi services. Cabbies with licenses that

hailing application that’s fighting bans

can cost $266,000 apiece have staged

by two German cities, may face a third

protests in European cities including

setback in the country.

London, Madrid, Paris and Berlin.

Investors including Goldman Sachs Group and Google Ventures

rides via Uber’s smartphone app need a

are pouring cash into the burgeoning

cab driver’s license because they are doing

market for apps that let users order

so to earn a profit.

taxis and cars or share rides using their

Governments and regulators in cities

smartphones. San Francisco-based Uber,

around the world are restricting Uber’s

which is active in more than 40 countries,

business on the grounds it poses safety

raised $1.2 billion in June, giving it a value

risks and unfairly competes with licensed

of $17 billion.

September 2014

getty iMAges

The Munich administration agrees with Berlin and Hamburg that those offering

Observer The World

CompIled by Hilda d’souza

Top 10

Singapore Suffers Falling Sales

WoRld’s MosT ValuaBlE sPoRTs TEaM 2014 rank

SportS team

1.

Real madrid

Value ($b) 3.44

2.

barcelona

3.20

3.

manchester United

2.81

4.

New york yankees

2.50

5.

dallas Cowboys

2.30

6.

los Angeles dodgers

2.00

7.

bayern munich

1.85

8.

New england patriots

1.80

9.

Washington Redskins

1.70

10.

New york Giants

1.55

GeTTy ImAGeS

26

Retailers billed it as the Great Singapore Sale, but many foreign shoppers were not impressed – especially the Chinese who discovered that they could buy goods cheaper in Hong Kong.

Revenue during the Great Singapore Sale that ran from May 30

SoURCe: FoRbeS.Com

to July 27 showed a two to four per cent decline.

WoRld’s MosT ValuaBlE soCCER TEaMs Value ($b)

Behind the mark-up: a strengthening exchange rate, rising

rank

SportS team

1.

Real madrid

3.44

labour costs and a sales tax Chinese tourists don’t encounter in neighbouring Hong Kong. A reduction in visitors from Asia’s

2.

barcelona

3.20

3.

manchester United

2.81

4.

bayern munich

1.85

5.

Arsenal

1.33

6.

Chelsea

0.868

7.

manchester City

0.863

Visitors from China to Singapore dropped 27 per cent in

8.

AC milan

0.856

the five months through May from a year earlier amid slower

9.

Juventus

0.850

10.

liverpool

0.691

economic growth on the mainland and the impact of a new

SoURCe: FoRbeS.Com

largest economy contributed to a sales slide of as much as four per cent in Singapore’s annual shopping festival, according to the retailers’ association.

Chinese law that clamped down on cut-price shopping tours.

Total tourist arrivals slid 1.7 per cent, according to the Singapore

WoRld’s HiGHEsT-Paid aTHlETEs rank

name

1.

Floyd mayweather

Tourism Board. earningS ($m) 105

2.

Cristiano Ronaldo

3.

lebron James

72.3

80

Singapore’s retailers, already facing growing regional competition, are under the most pressure since the Asian financial crisis. Singapore’s average retail sales growth dwindled

4.

lionel messi

64.7

to less than one per cent in the two years through May, according

5.

Kobe bryant

61.5

to government data that excludes motor vehicles. In Hong Kong,

6.

Tiger Woods

61.2

the average was 6.9 per cent in the 24 months through June.

7.

Roger Federer

56.2

8.

phil mickelson

53.2

9.

Rafael Nadal

44.5

10.

matt Ryan

43.8

SoURCe: FoRbeS.Com

International tourists including those from China, Indonesia and India account for at least 20 per cent of Singapore retail sales, with Chinese accounting for about half of that. Tourism Board data show Chinese visitors spent $640 million in Singapore in the first quarter, of which almost half was on shopping.

Portfolio

Commentary

28

Claire Cain Miller

Women on the Board Increasing the number of women

questions about women in business is

on boards can have multiple benefits.

boards that 384 of the 563 publicly

how to increase their numbers in the

Several studies have shown that diversity

traded companies subject to the quota

upper ranks, where their progress to the

on boards improves decision-making

became private to avoid complying. Yet

top has stalled.

and profits, yet women are often not

as women’s representation on Norwegian

considered for boards simply because

boards increased to 40 per cent in 2007,

is affirmative action for executives –

they are not part of the old boys’ club.

from five per cent in 2000, the quality of

requiring companies to include a certain

But the quotas’ limited effects show

the women on boards also increased, the

percentage of women in management,

that just getting some women at the top

study said.

particularly on their boards.

doesn’t remove all the obstacles blocking

Improvement at the top, the thinking

other women from the upper echelons.

An increasingly popular idea in Europe

goes, is likely to filter down at companies,

“This paper tells us that board quotas

The authors expected to find that these women, in turn, would mine their networks to appoint lower-level women

improving the pay and representation of

might just not be the policy engine for

executives, add workplace policies like

women at lower levels.

rapid changes for women in business,”

child care or inspire younger women

said Bertrand, who is one of the foremost

to delay having children to stay on the

economists studying women and work.

business fast track. But in the decade

Norway passed a law in 2003 requiring that women make up 40 per cent of the boards of public companies. Many

since Norway passed the law, none of

countries, including Spain, Iceland,

these things occurred.

“One explanation may be that it

Italy, Finland and France followed suit.

Advocates have proposed quotas in the

just takes more time,” said Linda Bell,

United States, although companies there

an economics professor who is provost

don’t like the idea that the government

and dean of the faculty at Barnard

could tell them whom to hire. In April,

College. In a 2005 study, she wrote that

two dozen US companies opened the

affirmative action at the very top helped

US branch of the 30% Club, which

the careers of women, because female

was started in Britain as a group of

executives and directors hire more

companies that aims to voluntarily

women and pay them more.

But how long will women be willing

appoint boards in which 30 per cent

to wait? In the United States, women

are women.

hold just 16.9 per cent of board seats at

Do quotas help crack the glass ceiling

the 500 biggest companies, according

for women in business? The most comprehensive study to date, led by

© 2014 new York Times news serviCe

the idea of appointing women to their

One Of the mOst perplexing

She wrote the paper with Sandra Black

to Catalyst, a non-profit research firm

Marianne Bertrand of the University of

of the University of Texas, Sissel Jensen

studying women in business, and that

Chicago, shows that at least in the short

of the Norwegian School of Economics

number is not growing.

term, they’ve had little effect beyond the

and Adriana Lleras-Muney of the

obvious: placing more women on boards.

University of California, Los Angeles.

If imbalances are not being righted naturally, women’s advocates may need

In Norway, the quotas have not led to an

Still, their study rebutted one of the

to find an outside motivator – if not

increase in the overall number of female

biggest criticisms of affirmative action

government-mandated quotas, then

executives, a decrease in the gender pay

for executives – that the women who

maybe activist investors. Persuading

gap, a boom in the number of young

serve would be unqualified or viewed as

companies to tap the entire pool of

women pursuing careers in business or

token appointees.

talent, not just half of it, seems as if it

more family-friendly workplace policies.

Norwegian companies so resisted

would only be good for business. n Portfolio

A.D. nAtAliA corbettA / fotogrAfiA mArio ciAmpi

made in italy

PIA COLzANI

FLEXFORM

SPA

gROundpiEcE

Tel. +39 335 8394824 pia.flexform@gmail.com

MEDA (MB) ITALIA www.flexform.it

design by ANTONIO CITTERIO

Profile

30

Portfolio

THE ON-DEMAND CONTENT MASTER Reed Hastings, like all good tech gurus, has taken a simple idea and made it into a thriving business. Through its on-demand video streaming and original content, Netflix has altered the media landscape forever, reports Guido Duken.

September 2014

31

Profile

32

y

OU CAN thank

quarter we passed HBO in subscriber

I was definitely underwater and over my

Apollo 13 for the

revenue ($1.146b vs $1.141n). HBO rocks,

head,” said Hastings. “I tried to fire myself

and we are honoured to be in the same

– twice. I was losing confidence.” The

league.” That’s quite the statement from a

board refused and Hastings had to learn

CEO known for his humility.

to be a businessman. “My transformation

idea that launched Netflix. Reed

Hastings, at that

point unemployed but

wealthy, had rented the

VHS tape but misplaced

Hastings has taken a long and convoluted road to becoming a tech titan.

After school he first wanted to study

from engineer to CEO was when Morgan Stanley took the company public in 1995.”

In 1996, Pure Software announced a

art but settled on mathematics. Next he

merger with Atria Software. A year later,

enlisted in the US Marines, served out his

Rational Software acquired the combined

two years and quit. Then he joined the

company, Pure Atria, for a rumoured $750

the video store $40. It was

Peace Corps and taught mathematics in

million. “And that gave me the money to be

all my fault and I didn’t want

Africa for two years. There, by his own

able to start Netflix with,” says Hastings. It

to tell my wife about it. And

admission, he learnt to stand on his own

has been a profitable decision. In Netflix’s

I said to myself, ‘I’m going to

two feet. “When you travel through Africa

2014 surge over $400 a share, Hastings

with $10, then you aren’t frightened of

broke through the 10-figure barrier to

starting a company any more.”

billionaire status for the first time.

it. “I had a big late fee

for Apollo 13. It was six

weeks overdue and I owed

compromise the integrity of my

marriage over a late fee?’”

Later, on his way to the gym, Hastings

Hastings studied further at Stanford

had a eureka moment. “I realised they

University and graduated in 1988 with a

THE RISE of Netflix is a classic example

[the gym] had a much better business

master’s degree in computer science. His

of what legendary tech startups do. The

model than the video store. You can pay

first job was at Adaptive Technologies,

company used new technology and a new

$30 or $40 a month and work out as little

working for then CEO Audrey MacLean

business model to use the web instead

or as much as you wanted.”

in 1990, where he invented a tool for

of physical stores. By transforming video

debugging software. Hastings learnt from

rentals into a monthly service it changed

movies in 1997 were still in the bulky VHS

MacLean: “From her, I learned the value of

the way customers perceived value and

format, which made them too expensive

focus. I learned it is better to do one product

created a change in media consumption.

to mail. Then a friend told him about the

well than two products in a mediocre way.”

This simple yet powerful idea crushed

The only problem was that most rental

new DVD format. Hastings bought some

In 1991, Hastings left Adaptive

Blockbuster Video. But Hastings was also

samples at Tower Records, mailed them

Technology to found Pure Software, which

aware of clouds on the horizon. In 2006 he

to himself, and sat back and waited. The

produced products to troubleshoot software.

listed downloaded movies as a “very real

DVDs arrived promptly and undamaged.

It was successful and grew into one of the

threat” to the future of Netflix. “If people

It was at this point that he realised

world’s 50 largest software companies. But

can get things electronically, maybe they

his plan would work. That same year,

it also posed challenges for the engineering

don’t need the physical disc anymore.”

Hastings and Marc Randolph co-founded

graduate who had no CEO experience.

Netflix, offering flat rate film rental by

“As the company grew from 10 to 40

mail to customers in the United States.

to 120 to 320 to 640 employees, I found

A good tech company knows how to innovate, as Netflix’s next step proved.

In 2007, its streaming video service

The unlimited due dates and no late fees resonated with customers. By 2002, Netflix had its initial public offering based on its DVD-by-mail subscription service.

Netflix has changed a lot since then: in content, how it provides that content, and size. The company’s second quarter results in July revealed that the total membership base had grown by 33 per cent from the year before to surpass the 50-million mark for the first time. This far exceeded Netflix’s own estimates. But the highlight for Netflix was made clear in a Facebook post by Hastings: “Minor milestone: Last Portfolio

33

launched, which has now surpassed the DVD subscription service. Netflix shares soared following the success of its streaming service and reached a peak near $300 per share in 2011. But then Hastings made a few blunders. First he split the DVD and streaming services into two separate subscriptions, which amounted to a price hike for many customers. Then Netflix announced it would spin off its DVD service into a completely separate service called Qwikster. Netflix shares fell 75 per cent as 800,000 subscribers fled.

Hastings reversed the Qwikster decision a month later, and did something rare among CEOs – he apologised.

“I messed up,” Hastings said publicly.

“In hindsight, I slid into arrogance

Netflix employees pack DVDs for postal distribution.

based upon past success.” Hastings listened to his customers, took swift action and Netflix fixed its pricing policy.

More importantly, Netflix rewarded its customers by innovating and making its services even better.

THE NEXT innovation to come from Netflix was to give people great entertainment, the way they want to consume it, at any time, on any device.

Thanks to the reams of data Netflix has on its customers it knows what, when, where and how customers watch video.

“As the company grew from 10 to 40 to 120 to 320 to 640 employees, I found I was definitely underwater and over my head,” said Hastings.

“I tried to fire myself — twice. I was losing confidence.”

September 2014

Trying to spin off the DVD division into Qwikster caused a backlash among consumers.

This allowed Netflix to create proprietary

moving to a world where “apps replace

content purpose-built for internet

channels”. “Existing networks, such as

streaming. It has proved hugely successful.

ESPN and HBO, that offer amazing apps

In 2013, Netflix became the first non-TV

will get more viewing than in the past

network to win an Emmy for the series

and be more valuable. Existing networks

House of Cards and, together with the

that fail to develop first-class content will

hugely successful Orange Is the New Black,

lose viewing and revenue.” In other words,

garnered another 30 nominations.

the days of TV channels dictating what

In 2013, Hastings wrote an 11-page

we watch are over. Programming is now

essay that laid out the future of streaming

in the hand of the consumer thanks to

video. His main statement was that we’re

on-demand video streaming.

Profile

34

We’re moving to a world where “apps replace channels”.In other words, the days of TV channels dictating what we watch are over. Programming is now in the hand of the consumer thanks to on-demand video streaming.

Netflix has gone from sending DVDs by post to on-demand video streaming, which now forms the core of its business.

THE BUSINESS case for Netflix’s future

Apple and Hollywood will catch up

is relatively simple: it needs to continue

with Netflix. The recent offer from 21st

to drive subscriber growth, push its

Century Fox for Time Warner, which

content and marketing, and expand

was rejected, indicates that there might

its margins. In this regards, Hastings

be a consolidation between the content

sees HBO as its biggest competitor. “It

production powerhouses that would

wouldn’t be surprising to us if HBO does

weaken Netflix’s bargaining power.

their best work and achieve their highest

However, Hastings doesn’t appear too

growth over the next decade, spurred

worried. “We’ll take it as it comes,” he says.

on by the Netflix competition and the

“The more we’re working directly with

internet TV opportunity.”

producers, the less vulnerable we are to

Netflix is performing well on subscriber

aggregation in the big content suppliers.”

growth. Second quarter subscriber growth

That’s is why Netflix is ramping up its original programming. “The content we

per cent, while international membership

have coming this year will completely

grew a phenomenal 84 per cent year

dwarf what we had last year,” says

over year. “What we’ve seen really is just

Hastings. One case in point is the recent

a tremendous adoption of on-demand

signing of comedian Chelsea Handler

viewing,” Hastings said. The increasing

and the new series Lillyhammer.

GETTY IMAGES

in the US – its domestic market – was 10

popularity of smart TVs, with their integrated streaming services, is a positive for the company. In September, Netflix is set to open in several key European

Hastings has recently joined the billionaires club thanks to Netflix’s rising share price.

markets, especially France and Germany.

Hasting’s long-term outlook is that in 10 to 20 years Netflix will have the best of the world’s content.

Speaking of the future, has Hastings mastered being a CEO? “Being a CEO is

This should help Netflix’s international

Plus creating original content is expensive.

a lifetime of learning,” he said in a recent

business break even in the third quarter,

Put simply, unlike HBO, Netflix is still far

interview. “So I would never say the word

but the rapid expansion is having a

from profitable.

‘master’. But I’m continuing to really enjoy

negative effect on the company’s earnings.

There is also the risk that Amazon,

the learning of it.” n Portfolio

Africa

36

Across sub-sAhArAn AfricA,

May that foreign investment in Africa

consumer demand is fuelling the

would reach a record $80 billion this year,

continent’s economies in new ways,

with a larger share of the money going

driving hopes that Africa will emerge

to manufacturing and not just the strip-

as a success story in the coming years

mining of resources.

comparable to the rise of the East

back of that, there’s a lot of commercial

20th century.

opportunity that’s emerging,” said Simon

After seeing years of uninterrupted

© 2014 New York Times News service

“The development is real, and on the

Asian Tigers in the second half of the

Freemantle, senior political economist

economic expansion across Africa,

at Standard Bank in Johannesburg,

governments, analysts and investors are

South Africa.

focusing on this fast-growing continent’s

At times messy and difficult to quantify,

shoppers and workers rather than just the

Africa’s economies give pessimists and

usual upswing in commodity prices that

optimists plenty of statistical ammunition

have driven past cycles of boom and bust.

to support their narratives of the future.

The African Development Bank projected in its latest annual report in

Growth is uneven. Inequality is rising in many corners. Millions of people still

geTTY images

Lanre Da Silva Ajayi is the designer and owner of LDA fashions in Lagos, Nigeria.

expaNdiNg Middle class Fuels grOWTh Consumer demand – not cyclical commodity prices – is fuelling development and economic expansion in sub-Saharan Africa, reports Nicholas Kulish.

Portfolio

37

getty images

A customer tries a fashion accessory at Temple Muse in Lagos.

live in extreme poverty. With violence

Kigali, Rwanda, do not improve the lives

simmering in the Central African

of subsistence farmers in the hinterland.

Republic, South Sudan and elsewhere,

Yet a sign of confidence is the success

Exports from sub-Saharan Africa leapt from $68 billion to more than $400 billion from 1995 to 2012. A total of

it’s easy to fall back on the old pessimistic

with which African countries have been

$300 billion of that came from natural

plotline for sub-Saharan Africa.

able to tap international capital markets

resources, the extraction of oil, natural gas,

of late. In spite of recent terrorist attacks,

precious metals and diamonds.

The middle class has expanded rapidly across the continent, but the population

Kenya sold $2 billion worth of bonds to

has grown so quickly that the absolute

international investors in June, which will

now coming from other sectors. In South

number of impoverished Africans has gone

be used in part to pay for infrastructure

Africa, for example, the broader economy

up at the same time. Sushi restaurants in

projects; two months earlier, it was

has been sluggish, but the black middle

Dakar, Senegal, and fancy coffee shops in

Zambia with a $1 billion offer.

class now spends more money than the

September 2014

But some of the most rapid growth is

Africa

38

white middle class.

For decades, this country’s long-

the middle of towns,” Mothibeli, 30, said.

expression. In the United States, it

“Now you have shopping centres.”

conjures the image of a suburban house

neglected black consumers spent their

The African Development Bank gave

with a white picket fence and a car in the

money on the far edges of the economy,

the Africa Rising debate a significant jolt

garage. The African Development Bank,

buying necessities like soap, salt and milk

in 2011 with a report declaring that the

on the other hand, defines someone as

at informal convenience stores called spaza

African middle class had grown to 350

middle class if he earns $2 a day or more.

shops. During the hard years of apartheid,

million people in 2010 from 126 million

Itumeleng Mothibeli’s grandparents ran

in 1980. The Organisation for Economic

class that’s expanding quickly,” said

one such shop in a township, the peri-

Cooperation and Development put the

Staffan Canback, managing director

urban communities to which blacks had

figure in 2010 at a mere 32 million, “or

of the consultancy Canback & Co, who

been exiled under the racist system.

roughly the same as Canada.”

has done business in Africa for decades.

Middle class is a fraught, even political,

Now Mothibeli manages 14 shopping

“The future is about that lower middle

He was talking about the people with

centres spread across four provinces of South Africa for the Vukile Property Fund.

The company targets the long-shunned township market for its high volume, turnover and foot traffic. Instead of the one-storey brick stand adjacent to his grandparents’ house, these are enormous Western-style shopping malls.

A cashier scans items at SOCOCE supermarket in Abidjan, Ivory Coast.

getty images

“The question of how the poor fared in the period of rapid growth in the last decade in Africa is a subject of controversy.”

getty images

“In the old days, you had cathedrals in

People of all races flock to the Neighbourgoods Market in Johannesburg, South Africa.

Itumeleng Mothibeli, right, who manages 14 shopping centres, speaks to a tenant at the Daveyton Mall in Daveyton, South Africa.

Portfolio

Africa

40

enough money left over for small packets

with more than one phone) to place

as the national averages that mask deep

of detergent or who can save money for

orders from online retail chains that have

inequality. The goal is a broad-based

name-brand shoes.

started to cash in on the country’s rising

improvement in the lives of the masses,

“You’re starting to see a middle class

middle class. “It’s loads of opportunity in

which has proved elusive.

even in a place like Angola,” Canback said.

the Nigerian consumer market,” he said.

“There’s a long way to go, but I think it’s

“Nigeria is on track to become one of the

in the period of rapid growth in the

incorrect to say that it’s only a few families

20 largest economies in the world.”

last decade in Africa is a subject of

that make all the money and no one else makes money. That’s definitely not true.”

The commercial gains are not spread equally across society or across the

Businesses alert to the opportunities are setting up shop in Africa.

In April, Marriott closed a deal to buy the 116-hotel Protea Hospitality Group, based in South Africa. Clothing companies like Forever 21 and Sweden’s H&M plan to open their first shops here as well.

Wal-Mart’s South African arm, Massmart, has stores in a dozen African countries, including Uganda and Mozambique, and plans to expand into Angola next year.

Last year, Honda opened its third motorcycle subsidiary in Africa, based

“The question of how the poor fared

controversy,” said Mthuli Ncube, chief economist at the African Development Bank. “The precise relationship between

Middle class is a fraught, even political, expression.

In the United States, it conjures the image of a suburban house with a white picket fence and a car in the garage.

in Kenya, including a new assembly

poverty and growth in the long term depends crucially on a growth pattern that is accompanied by structural shifts where labour moves from a low productivity to high-productivity sectors.”

That means more good jobs in manufacturing and services and fewer subsistence farmers. But that has been a goal for leaders across Africa since the dawn of the postcolonial period.

Whether the continent’s governments are up to the task, there is no question that the individual, entrepreneurial drive is

plant. Heineken plans to invest nearly

present and pushing Africa ahead.

$700 million a year in Africa to keep up

continent. A study of the top African

“There’s just this amazing determination

with the demand of the continent’s beer

brands found that of the top 25, all but

to get places,” said John Simpson, director

drinkers. The Chinese shoemaker Huajian

one – Kenya’s Safaricom – came from

of the Unilever Institute of Strategic

is spearheading the construction of a $2

Nigeria or South Africa. Seven of the top

Marketing at the University of Cape Town.

billion special economic zone in Ethiopia

10 brands were South African. How the

that will focus on light manufacturing.

spoils of growth are shared is as important

“It’s a relentless desire to make more, to get better, to have a better lifestyle.” n

Perhaps no country illustrates the pitfalls and opportunities quite as starkly as Nigeria. Even as the country is projected to grow at a swift 7.3 per cent clip this year and next, the kidnapping and murdering by Boko Haram militants, who operate with impunity in Nigeria’s northeast, transfix the world.

Adewale Opawale, executive director at Strategic Research and Management (STREAM) Insight, a market and social research company in Lagos, said he had witnessed drastic change not just in the number of cars on the streets and airplanes taking off from the international airport there, but in the way that people do business.

Consumers are moving from running around with cash for purchases to using their internet-enabled cellphones (many

Customers talk to a sales person, second from left, at a furniture and appliance store in the Daveyton Mall.

Portfolio

Internet

42

EuropE’s

Love of US Tech TiTans Despite worrying about their privacy, Europeans are heavy users of Facebook, Google and Amazon, reports Mark Scott.

On weekends, Guillaume Rosquin browses the shelves of local bookstores in Lyon, France. He enjoys peppering the staff with questions about what he should be reading next. But his visits, he says, are also a protest against the growing power of Amazon. He is bothered by the way the US online retailer treats its warehouse employees.

Still, as with millions of other Europeans, there is a limit to how much he will protest.

“It depends on the price,” said Rosquin, 49, who acknowledged that he was

Facebook has doubled its number of European users in the past five years.

© 2014 New York Times News service

geTTY images

planning to buy a BlackBerry smartphone on Amazon because the handset was not yet available on rival French websites. “If you can get something for half-price at Amazon, you may put your issues with their working conditions aside.”

Across Europe, love – or at least acceptance – often wins out in the lovePortfolio

43

Russell Albert, a British software engineer, switched to using smaller search engines after noticing his Google search results were too closely based on his internet search history.

hate relationship with US tech companies like Amazon, Facebook and Google.

Despite their often vocal criticism of these behemoths, people in the region are some of the most active and loyal users of US social networks, search engines and e-commerce websites. They are often even more hooked on the services than

“If you can get something for halfprice at Amazon, you may put your issues with their working conditions aside.”

Americans are.

US tech companies operate seven of the 10 most visited websites in Europe, according to comScore statistics. Only Yandex and Mail.ru, a Russian search engine and an email site, and Axel Springer, the German publisher of Die Welt and Bild, make the list.

Nonetheless, from Spain to Sweden, many of Europe’s millions of internet

Google now has an 85 per cent market

users regularly complain about the

share for search in the region’s five largest

dominance of American tech companies,

economies, including Britain, France and

practices in Europe – also has more than

particularly about how their data is used

Germany, compared with less than 80 per

doubled its number of European users,

and shared. It also leaves them wondering

cent in 2009, according to the research

to more than 150 million, in the past five

why so few home-grown tech companies

company comScore. Google’s share of the

years, and the social network’s European

are globally competitive.

US market stands at roughly 65 per cent.

user numbers now outpace US figures,

Facebook – the target of several government investigations for its tax September 2014

For many Europeans, the likes of Twitter

according to the social media research

and Amazon hold too much information

company eMarketer.

about what people do online. That

Internet

44

Scotland, a reliance on US tech companies has become the cost of doing business.

Turnbull once tried to shut down his Facebook account after realising that he was spending too much time sharing posts and comments. Yet as he looked to build contacts with other writers and editors around the world, Turnbull, who works from a home office in the small town of Crieff, soon changed his mind. He even opened a second Facebook account dedicated to his literary career.

While he remains concerned about how tech companies use his online

getty images

The Factory, which houses internet startups in Berlin, is being supported by Google.

wariness has only grown stronger after

request that information be taken down.

the revelations by Edward J. Snowden,

And the European Commission, the

the former National Security Agency

executive arm of the European Union, is

contractor, about US intelligence agencies’

finishing new rules – tougher than those

spying activities and perceived easy access

currently in force in the United States –

to the world’s tech infrastructure.

intended to strengthen the region’s privacy

In some ways, Europeans are pushing back.

This summer, Google started removing some links to online search results after Europe’s highest court ruled that the company had to give people the right to

protections for online data.

But leave the clutches of the services they deride? No. For Stuart Turnbull, 42, a writer who

data, the ability to tap into the global networks offered by the likes of Facebook and Twitter is too enticing a prospect to turn down.

European social networks, particularly in Germany, once dominated online communication but gradually fell out of favour as Facebook’s global reach grew.

lives two hours north of Edinburgh,

“I accept that my data may be mined,” said Turnbull, who says he is more worried about companies potentially abusing his information than about governments accessing his online data.

“It’s the price you pay for using these so-called free services.”

In many ways, the US companies face little competition. For example, several regional e-commerce sites like the British fashion company ASOS have challenged Amazon but have yet to compete with the breadth of products – and discounts – getty images

offered by the American company.

European social networks, particularly in Germany, once dominated online A customer uses a keyboard on an Amazon.com pickup and collect locker in the UK.

communication but gradually fell out of Portfolio

Internet

46

Guillaume Rosquin browses the shelves of a local bookstore, which he visits in protest against the growing power of Amazon, in Lyon, France.

After Facebook’s purchase of the

favour as Facebook’s global reach grew.

his internet search history. He switched

Government efforts, including a French

to using smaller, lesser-known search

messaging service WhatsApp, rumours

plan to create a state-backed search

engines and began looking for alternatives

abounded that European users of the

engine to compete with Google, have also

to other Google products, like its popular

messaging service would flee, fearing

failed to take off.

email service.

that Facebook would gain access to their

But not every European has succumbed to the dominance of the US tech companies.

Six months ago, Russell Albert, 43, a

Surfing the web may not be as easy

personal information despite reassurances

with these other services, Albert said,

from the company that it would keep

but he is still glad he switched. “I hated

WhatsApp user data separate.

Yet six months after the announcement

British software engineer, started thinking

being completely Googled up,” he said. “I

that the ads displayed next to his Google

decided that I didn’t want to have all my

of the deal, WhatsApp says its user

search results were too closely based on

eggs in just one basket.”

numbers have increased to half a billion – many of them Europeans.

After Facebook’s purchase of the messaging service WhatsApp, rumours abounded that European users of the messaging service would flee, fearing that Facebook would gain access to their personal information despite reassurances from the company that it would keep WhatsApp user data separate.

Among them is Lara Goldsworthy, 31, a marketing manager from Hamburg, Germany. “WhatsApp would have been the first service that I would have left, but I didn’t,” said Goldsworthy, who added that many of her German friends – seemingly without irony – took to Facebook to complain about the social network’s acquisition of the messaging service. “I realised,” she said, “that I had given up my privacy a long time ago.” n Portfolio

enjoy responsibly

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

Technology

48

When Praveen narayan Dusane first started driving an auto-rickshaw in the crowded college town of Pune, he had to hustle for every rupee. He could wait hours at a rickshaw stand for passengers.

He fought with other drivers and haggled with passengers over the fares. Typically, he earned just 300 rupees (roughly $5) during a 12-hour shift.

Now Dusane simply checks the text messages on his cellphone for his schedule, with pickups usually coming every hour or so. Business is so brisk that he recently bought an apartment for $33,000 and

© 2014 New York Times News service

can afford to send his three school-age daughters to an English-language school.

“Earlier, I had to sometimes wait all day for a ride, and even then it was up to your luck the kind of fare you got,” Dusane said.

“Now it’s like you can see the money in front of you.”

It is the advantage of the algorithm.

Indian startups are using programs with algorithms to connect auto-rickshaw drivers with customers, reports Megha Bahree.

Streamlining the autorickShaw BuSineSS Portfolio

49

September 2014

Technology

50

The company promises drivers higher and more predictable income, along with fewer dead kilometres, those without a passenger on board.

In a country clogged with congestion, a handful of startups are using technology to more easily connect auto-rickshaw drivers with customers – an Indian twist to Uber

Mukesh Jha, a co-founder of Autowale, leads a training workshop for the firm’s rickshaw drivers in Pune.

and Lyft, the taxi-hailing apps. Dusane’s

rickshaws off the streets, but getting one

the company’s app or website, as well as

employer, Autowale, uses a program to map

depends on a combination of negotiating

through the more old-fashioned method, its

out potential routes and maximise pickups.

skill and luck. Most drivers tend to charge

call centre. Passengers pay a convenience fee

AutoRaja has a dial-an-auto service in

a flat, inflated rate, instead of going by the

of about 33 cents per ride.

Chennai. In Bangalore, mGaadi offers

meter, and often turn down prospective

rickshaw bookings via its website and app.

customers if the distance is too short or to

September, the service is expensive and

an area from which they might not get a

doesn’t compete in the same space. As in the

fare back.

United States, Uber, which operates in six

The three-wheeled, often black and yellow auto-rickshaws are ubiquitous in India, where public buses are rather

Autowale is trying to make the process

abysmal, subways are limited and taxis are

easier by offering rickshaws on demand.

few and expensive. People can hail auto-

Customers can request a rickshaw through

Although Uber came to India in

Indian cities including New Delhi, Mumbai and Bangalore, focuses on the taxi market.

Autowale doesn’t have all the gadgetry of Uber or Lyft. It doesn’t use GPS, and most drivers don’t have smartphones, which can be expensive. Instead, the founders created an algorithm that predicts an autorickshaw’s potential route for the day, and assigns pickups accordingly. They serve up the driver’s schedule via basic text messages.

The company promises drivers higher and more predictable income, along with fewer dead kilometres, those without a passenger on board. In return, the company receives a commission of 10 to 15 per cent from the drivers. Autowale, which isn’t profitable yet, reported revenues of about $335,000 last year.

It is also looking into insurance for its drivers, which is relatively rare in India.

Praveen Narayan Dusane checks his schedule via text message.

In late June, one Autowale driver, Malaya Swami, fractured his arm after a car backed into his auto-rickshaw. He is now unable to work for six weeks.

Portfolio

getty images

Technology

52

The three-wheeled auto-rickshaws are ubiquitous in India.

Autowale gave him a loan of 5,000

if they didn’t get enough passengers.

Prasad said the company had resolved

rupees (about $80) to cover part of his

To commuters, they promised an auto-

some of the earlier problems and was also

expenses, and has offered him work

rickshaw if they booked one. “We said to

focused on driver training. At its office,

recruiting other drivers so he has a chance

them, work with us for six months, and

which doubles as a training space, Autowale

to earn some money while recovering.

we’ll give you the rides and the fares and

conducts regular workshops. For example,

The startup is in talks with insurance

improve your income,” Prasad said. Within

they had to teach some older drivers how to

companies to cover all its drivers.

three months they had 75 drivers in their

read text messages and how to get a number

system and were executing up to a hundred

from a text to call a customer. “All they knew

trips a day.

were two buttons – green to connect and red

“I like my work,” Swami said. “I’m waiting for my hand to get OK so I can get back to driving my auto.”

Autowale now works with 850 drivers –

to disconnect a call,” Prasad said. Training

including about 250 regulars – and ferries

sessions have also included some basic

The firsT version of Autowale – founded

about 100,000 passengers a year. After a

phrases in English: “good morning,” “you’re

by Janardan Prasad and Mukesh Jha,

successful pilot in Bangalore, it is planning

welcome” or “have a good journey” when

friends since college – was a flop. They

to introduce service there, and in three

dropping off a passenger at the airport.

initially developed a network of 400 auto-

other Indian cities, as soon as it can raise

rickshaws across Pune. But they had too

the money for its expansion.

many rickshaws and not enough passengers

Autowale has faced its share of growing

One of the main areas of focus has been teaching drivers the concept of customer retention. For Autowale drivers, they

for the unknown service. “What had failed

pains. As the customer base has increased,

instruct, the chances of encountering repeat

was a lack of commitment on both sides,”

there have been quality concerns. Satish

customers are high. And if they don’t behave

Prasad said. “It was kind of like dating. You

Chandra, 77, who has been a regular

properly, they dilute the brand and their

have to commit to try to make it work.”

customer since 2012, complains of rude

own incomes.

In summer 2011, they revamped their

drivers, late pickups and inadequate

“The key is to earn with respect and

model and started out with five drivers,

responses from the call centre. “The service

dignity and in a professional manner,”

promising them a specific income, even

has deteriorated.”

Prasad said. n Portfolio

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Hong Kong’s RicH Resist MaRKet FoRces The superluxury real estate market is holding its own even as property prices in the lower-tier sectors dip, reports Joyce Lau.

individuals already have other homes.”

When the Opus prOject Was

buyers from outside Hong Kong. Still, at

unveiled in 2012, its developer boasted

the beginning of July, Swire announced

that the apartments there, designed by

that another Opus unit had sold for $55.5

Conduit Road, a 2009 development that

star architect Frank Gehry, would be the

million. The buyer was apparently local.

like Opus has achieved sales records.

most expensive in Hong Kong – and, by

The sale illustrated how seemingly

Henderson Land, the developer of 39

Another high-profile complex is 39

bulletproof Hong Kong’s superluxury

Conduit Road, is valuing its Unit A

housing market is, experts say. Prices

penthouse at $83.3 million. But the

a Hong Kong conglomerate – sold one of

have remained roughly the same even as

penthouse is not for sale. According to

the 12 units for a record 455 million Hong

the number of transactions has dropped,

a Henderson spokeswoman, Gabriella

Kong dollars, then about $58.7 million,

showing that developers and rich owners

Chow, the home is empty and owned by

making Opus an emblem of the city’s

are happy to hang on to prized properties

the developers.

superluxury market. Another unit sold

– even empty ones – as the rest of the

the same year for about $55.5 million. It

market dips.

extension, probably the world.

That year, the developer – Swire Pacific,

© 2014 New York Times News service

Real Estate

54

For all the hoopla surrounding Opus when it opened two years ago, it remains

was the high-water mark of a boom time:

“They have holding power,” Thomas

partly empty. Of the nine remaining units

From the 2008 financial crisis until 2013,

Lam, head of valuation and consulting at

that Swire holds, five are leased, three are

residential property prices in Hong Kong

real estate service provider Knight Frank

available for rent and one is being held by

rose about 120 per cent.

Hong Kong, said of wealthy investors.

the company, according to Lydia Tsui, a

“For them, the holding costs are relatively

company spokeswoman.

Last year, the government sought to cool the market with tighter mortgage rules

low, and they don’t need the rent. They

and a higher tax aimed at some high-end

can keep it empty. High-net-worth

With Opus, Swire used a bidding system to avoid having to disclose a full price list, Portfolio

55

getty images

Hong Kong real estate is regarded as a safe haven.

September 2014

56

room for 2,100 apartments. Almost all

Property is advertised at a Hong Kong realtor.

land in Hong Kong is owned by the government but leased out for private use.

“In most property sectors, values have either stabilised or come down,” said Simon Smith, head of Asia-Pacific research for Savills, a real estate company based in London. “Prices across the board are off five to 10 per cent since 2013. And the volume of transactions has come down even more heavily.”

The so-called normal luxury market in Hong Kong – middle- and upper-class homes that cost about $1.3 million or

getty images

more – is one of the softening sectors.

According to a Savills research report released in May, luxury apartment prices which would otherwise be required under

of Hong Kong, where similar homes

were down about eight per cent from their

a 2013 ordinance to prevent backdoor

cost about $30 million. According to

peak in the fourth quarter of 2012 and

dealings. Rather than list the units on

The Times, the villa seemed “vacant” and

were forecast to fall an additional five to 10

the market, the company collected sealed

“falling into disrepair.”

per cent in 2014.

offers from prospective buyers.

The Hong Kong government has often

According to analysts, about half of the

faced criticism for policies that make

purchases at popular luxury developments

on how many privately held properties are

homes unaffordable for average families,

were by mainland Chinese before the 2013

empty. But some newer luxury towers in

and it is trying to create more housing

cooling measures.

popular districts like West Kowloon are

stock, which could bring prices down in

dotted with undressed windows and empty

sectors other than superluxury apartments.

where people have accumulated vast

living rooms.

The government and the MTR Corp – a

wealth, but there is only so much room for

government-linked company that is both

investment,” Smith said. “And Hong Kong

that Zhang Yannan, a niece of President

the city’s subway operator and a major

real estate has always been a safe haven.”

Xi Jinping of China, owned a villa in the

property developer – announced in June

In that regard, Hong Kong is most

beachside Repulse Bay neighbourhood

the release of five sites that could provide

often compared with London but with a

The government does not have statistics

In June, The New York Times reported

“It’s a desire to get money out of China,

different clientele.

“In the case of London, you have a much more international buyer demographic,” Smith said. “Overseas buyers in Hong Kong tend to be mainlanders, and not so much the Arabs, Russians and Europeans.”

The 2013 changes were made in response to public bitterness over luxury homes that were empty while Hong Kong’s poorest had to wait for public housing or live in tiny “cage homes” or “coffin rooms.”

“With the government measures in place, new supply on the way and rates set The Frank Gehry-designed Opus, a super-luxury apartment tower in Hong Kong where units have sold for over $55 million.

to rise,” Smith said, “you will see a further correction in prices eventually.”

Opus and 39 Conduit Road are on streets that curve up to The Peak, a highPortfolio

“If you look at future housing supply,

Some critics of the protest movement,

Hong Kong Island that is the centre of the

only 10 per cent will be on Hong Kong

called Occupy Central, have warned that

superluxury world. But less prominent

Island, 15 per cent in Kowloon and 75 per

political instability could hurt the local

property developments are spreading

cent in the New Territories,” said Lam, of

economy, but so far the superluxury

across the Kowloon Peninsula and further

Knight Frank Hong Kong.

market has spoken for itself. The recent

priced enclave overlooking the rest of

afield to the mostly rural New Territories.

On July 8, a week after a large protest

Opus sale was announced July 1, the day of

calling for greater democracy in Hong

the huge protest, which by some estimates

developments in Kowloon and the New

Kong, a Barclays Bank representative was

drew hundreds of thousands of people.

Territories simultaneously put more than

quoted by a local newspaper, the South

600 apartments on the market. There

China Morning Post, as saying that a plan

rock superluxury housing, Lam said,

were lines of potential buyers outside the

by pro-democracy activists to block the

“Not unless there are effects to the larger

buildings, followed by eager agents waving

financial district could bring about one of

economy or stock market.”

glossy brochures and business cards.

the “unexpected shocks” to the property

On a busy Saturday in June, four luxury

One of the four is the Grand Austin,

market that he had described in a report.

Real Estate

57

When asked whether unrest could

“This is Hong Kong,” he added, a few days after the protest. “Life goes on.” n

under construction in West Kowloon.

The area is choked with dust, noise and congestion because of two government projects: a high-speed rail terminal that will connect to mainland China and

Upmarket apartments and houses rise behind a fisherman in Hong Kong’s Deep Water Bay.

the yet-unbuilt West Kowloon Cultural District. The thinking is that home prices will jump once rich mainland Chinese can commute directly to a complex with shiny new museums and theatres. In addition, rents and property prices have risen in New Territories areas near the mainland border because of the influx of moneyed

The Hong Kong government has often faced criticism for policies that make homes unaffordable for average families, and it is trying to create more housing stock, which could bring prices down in sectors other than superluxury apartments.

September 2014

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shoppers there.

Fisheries

58

getty images

grOWiNg shrimp iN a Barrel

Portfolio

59

In a warehouse south of Boston, far from the city’s bustling harbour, James Tran, a semiconductor designer, is incubating an unlikely product: shrimp.

Tran, who started Sky8 Shrimp Farm two years ago, is one of a growing number of small, high-tech shrimp farmers in the United States racing to meet the country’s seemingly insatiable appetite for scampi, without ravaging the environment, using harmful chemicals or depending on overseas suppliers accused of labour rights violations.

“To go on getting shrimp the way we have is wishful thinking,” said Tran, cupping several twitching, ready-to-ship scampi in his hand.

His extended family in Vietnam engages in traditional coastal shrimp farming, the kind often linked to environmental, food safety and labour troubles. But at Sky8, shrimp mature in fibreglass tanks fitted with advanced recirculation, filtration and temperature control systems. “I think our industry is going to kick off pretty fast,” he said.

Americans love shrimp, which overtook canned tuna as the most-consumed seafood per capita in the United States in 2002. Americans consumed an average of just over 1.7 kilograms of shrimp in 2012, twice the amount three decades ago, according to the National Oceanic and Atmospheric Administration.

But the nation’s and the world’s taste for scampi comes with heavy social and environmental costs. Most of the shrimp the US imports comes from farms in Latin America and in Southeast Asia, where environmental and human rights experts have long identified labour rights abuses, hazardous

New aquaculture methods are being tested as demand and prices for shrimp rise and natural stocks decline, reports Hiroko Tabuchi. © 2014 New York Times News service

working conditions, damage to ecosystems and

September 2014

the use of hormones and antibiotics.

Since last year, a bacterial disease has hit shrimp farms across Asia and Mexico, crippling shrimp production. Recent media reports have alleged the use of slave labour on boats that supply fish meal for shrimp farms in Thailand.

Shrimp fishing has also run into grave

problems. Stocks are under pressure across

closed, intensive shrimp farming, and there’s

There is little risk that shrimp might escape

the globe. China, once a major shrimp

certainly a market for that,” he said.

and harm wild stocks.

exporter, now imports shrimp to meet

The new wave in US shrimp farming

That attention to detail comes with a

growing demand. US regulators called off

is part of a push by both government and

cost. Tran ships as much as 590 kilograms

this year’s Gulf of Maine shrimping season

industry officials to raise the stature of

of fresh shrimp a month to local high-end

after research suggested that overfishing

aquaculture and reverse a disdainful public

buyers at about $33 per kilo, as much as

and warming waters had driven shrimp

perception to farmed seafood, in part

twice the price imported frozen shrimp can

stocks to new lows.

because of past controversies over cultivated

sell for. Still, he says Sky8 is struggling to

ocean products.

meet demand from local high-end retailers

Those mounting concerns are spurring a new generation of shrimp farmers, like Tran,

and restaurants. “We desperately need to

who are developing ways to reduce their

Overall, US farmers made up just 0.8

environmental footprint. Though official

per cent of global aquaculture production

statistics are not yet available, the number

in 2011, according to the United Nations

said Michael Rubino, who heads NOAA’s

of small indoor shrimp farms in the US has

Food and Agriculture Organisation.

aquaculture programme. “We’re at a

grown from just two to at least 22 during

Fisheries officials estimate that doubling

tipping point in the public perception of

the last five years, with dozens more in the

US aquaculture production could create

aquaculture as part of the problem to part

pipeline, according to RDM Aquaculture,

50,000 jobs and more than $1 billion in

of the solution.”

which provides equipment and know-how

revenue for farmers.

to other shrimp upstarts.

Some farms are started by entrepreneurs

expand capacity,” he said.

“They’re real pioneers. Hats off to them,”

Long a delicacy, shrimp first became more widely popular in the United States

At Sky8 Shrimp, run by four workers, it takes about three months to grow batches

in the 1970s, when the Red Lobster

like Tran. Others are started by farmers

of 40,000 shrimp larvae, which feed on

chain introduced popcorn shrimp at its

looking to diversify from commoditised

fish meal, algae and seaweed, to a size

restaurants nationwide. The rise of shrimp

crops and livestock.

favoured by retailers and restaurants. (Sky8

farming in Asia had greatly expanded

“The situation is very much in flux,”

Shrimp is developing a feed that is free of

global shrimp production, driving down

said Pete Bridson, aquaculture research

fish meal.) The farm uses tanks of Atlantic

prices and helping to bring shrimp to a

manager at the Monterey Bay Aquarium’s

Ocean water, filtered and reused from

mass audience.

influential Seafood Watch programme,

harvest to harvest.

Though US attempts to kick-start

which gives shrimp from these tank-based

There are no antibiotics, no hormones

commercial shrimp farming also dates to

farms its highest rating for seafood that is

and no pesticides, according to tests carried

the early 1970s, the industry struggled to

farmed or fished sustainably. “We’re seeing

out at Sky8 last year by the Food and Drug

compete with the cheap shrimp imports.

newer farms come along that engage in

Administration, which regulates shrimp.

Moreover, early shrimp farms were in open-

At Sky8, shrimp mature in fibreglass tanks fitted with advanced recirculation and filtration systems.

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Fisheries

60

American’s consumed an average 1.7 kilograms of shrimp per person in 2012.

Portfolio

61

air ponds or near the coast, and sometimes released effluent into sensitive ocean habitats. Hobbled by cutthroat competition from cheap imports, and disease worries, production at these early shrimp farms has declined since the early 2000s.

But now, the tide could be turning. The average price of shrimp imported into the US during the first quarter of the year was 45 per cent higher than last year, according to data carried by the trade journal, Undercurrent News. Darden Restaurants, which earlier this year agreed to sell Red Lobster for $2.1 billion, has said rising shrimp costs could add $30 million to the chain’s expenses in 2014 compared to last year.

Experts also say consumers are increasingly demanding more sustainability and food transparency – though US shrimp farmers could still struggle to convince the average shopper that seeking out homegrown shrimp at higher prices is worth the deal.

“With food, everything revolves around

getty images

two things: Will this make my life easier Catches of wild shrimp have been declining due to overfishing and climate change.

and my food cheaper?” said Harry Balzer, chief food industry analyst at the consumer research company, the NPD Group. “But we do want to be healthy. There’s never been a time we didn’t want to be healthy.” n

James Tran holds a beaker of shrimp larvae at his Sky8 Shrimp Farm.

September 2014

Essentials

63

The besT of leisure and lifesTyle

Ship Shape

OslO getty images

Norway has a proud tradition of exploration and seafaring, nowhere better on display than in Oslo’s outstanding maritime museums, reports Brian Johnston.

September 2014

Essentials

Travel

Akker Brygge is a chic residential area known for its waterfront restaurants.

T

here are some things

Explorer Thor Heyerdahl crossed the Atlantic on the Ra II.

universally fascinating to children, such as dinosaurs, pirates, ancient Egyptian

mummies and Vikings. And so the child in me is utterly delighted when I finally see my first Viking ship, not in the pages of a school project, but right in front of me. I can smell the ship’s peaty wood and, when I lean forward, my nose is practically pressed against the prow’s intricate serpent carvings.

Dinosaurs and mummies only come

These three Viking funeral ships date from the ninth century and were used to inter members of the nobility, surrounded by items considered useful in the afterlife, from food and weapons to travelling carts.

alive in movies, but this is the real thing: three Viking ships hauled up from the bogs of Norway. Okay, the Tune ship is so badly damaged it looks like a pile of planks, though it can tell you a thing or two about how the Vikings constructed

These three Viking funeral ships date from the ninth century and were used to

corbis

64

inter members of the nobility, surrounded

their sailing vessels. But the Oseberg ship

by items considered useful in the afterlife,

is virtually intact, down to its dragon

and looks ready to head off down the

from food and weapons to travelling

carvings, full set of oars and benches

Oslofjord. Indeed, a replica once sailed

carts. Wood, leather and even textiles

for 30 oarsmen. And the 24-metre-

across the Atlantic, amply demonstrating

have all exceptionally survived owing to

long Gokstad, though less elaborate, is

the sound design and navigational

the particular layers of blue clay and turf

the largest Viking ship ever unearthed,

capabilities of this ancient sailing ship.

in which the ships were encased.

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65

The incredible artefacts of the Oseberg ship, in which a queen was buried, are now on display in museum cabinets.

Among the most beautiful objects are maple posts carved with elaborate animal heads, highly ornate ceremonial sledges,

The Gjoa, the wooden sailing ship that Roald Amundsen first sailed through the Northwest Passage between 1903 to 1906, now at the Fram Museum.

and textiles woven with gold thread. But even the most ordinary of objects are fascinating, from buckets made from brass and wood to a hunter’s rucksack, a games board and painted tent frames.

There’s also a large oak wagon decorated with carved animals and designed to be pulled by two horses, the only one of its kind ever found from the Viking era. corbis

You’ll find the Viking Ship Museum on Oslo’s Bygdøy peninsula. You can get there by bus, but it’s quicker by ferry from downtown Oslo, itself founded by

apt, as you chug out across Oslofjord to

not least the Henie-Onstad Kunstsenter,

a Viking king in the eleventh century.

the sound of shrieking seagulls and the

a wonderful collection of modern art

Catch the ferry at Aker Brygge, once

sight of dozens of yacht sails.

with an open-air theatre. You can hike

a shipbuilding centre until it was

Oslofjord is a treat. It extends its

across its Hovedoya Island and inspect

redeveloped as a chic residential district

watery finger some 100 kilometres out

monastery ruins a thousand years old

now known for its waterfront bars and

of the city to the open sea. You’ll find

and explore historic settlements along

restaurants. Getting a ferry there seems

some worthy sights along its shoreline,

the eastern shore, such as Fredrikstad

September 2014

Essentials

Travel

and Halden. Oslo folk flock to the fjord in

A lighthouse in the 100 kilometre-long Oslofjord.

summer to fish, boat, windsurf, swim and flop on warm rocks; the Bygdøy Peninsula is home to one of its most popular beaches at Huk. Bygdøy is sometimes nicknamed the museum peninsula because it has numerous excellent museums, most devoted to aspects of Norway’s impressive maritime history. It isn’t often that I’m truly wowed by a museum display, but here it happens not just once, but again as I walk into the Fram Museum and see an entire ship looming above me. The Fram was once the world’s strongest wooden ship, with a hull specially frozen polar oceans. In the 1890s it sailed the Arctic under the command

getty images

The intricately carved bow of the Oseberg viking ship.

designed to withstand the grip of the corbis

of famous polar explorer Fridtjof Nanse, and later explored the waters of far

photographs and film that make the

polar vessel to a three-masted schooner

northern Canada.

voyages come alive. Step into the Dark

and traditional fishing boats. A section

Walk and you suddenly find yourself on

devoted to shipwrecks graphically depicts

and 1912 under Roald Amundsen – later

the heaving deck of the Fram at -10°C,

the dangers of Norway’s rugged coast and

the first man to reach the South Pole – is

its wooden hull creaking ominously

Arctic exploration. A quick look around

its most renowned, during which it sailed

under your feet. A few minutes under

might do here, but don’t miss the superb

further south than any vessel in history.

these simulated conditions is more than

panoramic film entitled The Ocean: A

It was frozen into Antarctic pack ice

enough, never mind years.

Way of Life. Its sweeping aerial shots of

But its third expedition between 1910

for much of the voyage. The crew spent

Norway’s wild coastline are stunning.

nearly three years in appalling conditions,

From here, it’s just a few steps to

getting off the ship only to explore or

the Norwegian Maritime Museum,

a final destination, the nearby and

paddle the insubstantial animal-skin

which displays everything from another

very absorbing Kon-Tiki Museum. It’s

You’ll want to save more time for

kayaks that are also on display.

Unlike most museum exhibits, you can walk all over this one and take a look around the cabins, engine room and cargo hold of the ship. The sealskin jackets of the crew still hang in the

The floating glass and steel iceberg monument in front of the new Opera House in Oslo.

captain’s quarters. Off the ship, the museum displays many artefacts relating to these polar voyages and explains their significance in terms of historical and scientific exploration. Many of the original navigational and scientific instruments are on show, along with replicas of Scott’s motor sledge and Amundsen’s tent.

It’s far from a fusty museum, with a

getty images

66

very contemporary, sleek look, superb lighting effects and a mix of objects, Portfolio

67

Patrons enjoy a summer’s day at Akker Brygge.

getty images

getty images

Renowned Norwegian explorer Thor Heyerdahl.

devoted to a more recent Norwegian

by a tattered woven sail. The Kon-tiki is

a feat would have been possible for pre-

navigational feat, the 1947 journey across

very cleverly displayed so that you can

Columbian people. Though the rafts alone

the Pacific between Peru and Polynesia by

walk around the entire craft above, then

are worth inspection, the museum also

Thor Heyerdahl. Although Heyerdahl’s

descend to inspect it as if from beneath the

details the voyages, the scientific theories

eccentric theories (namely, that the

water. You can see a fragile wicker basket

behind them, and the archaeological

Polynesians came from the Americas)

in which the crew were lowered into the

finds that Heyerdahl made on Easter

have since been discredited, there’s no

ocean for a wash. A model of a 10-metre

Island. You can watch screenings of the

denying his nautical achievement.

whale shark swimming past shows just

original 1951 Oscar-winning documentary

how vulnerable the expedition was.

on the Kon-Tiki voyage, which took 101

Seeing the fabled Kon-Tiki up close is truly mind-boggling. The fragile craft

The museum also houses the original

days and covered some 8,000 kilometres.

is ludicrously small, made from balsa-

papyrus Ra II in which Heyerdahl crossed

Even the Vikings would have been

wood logs lashed with cord and topped

the Atlantic in 1970, showing that such

impressed by that. n

corbis

A monster head, carved on one of the sledges found buried at Oseberg.

September 2014

corbis

The Fram was specially built to withstand the Polar pack ice.

Essentials

Motoring

Detroit Love, SweDiSh StyLe The Big Power Meet, a huge classic-car gathering, clearly illustrates the Swedish love affair with old American cars, reports Vegas Tenold.

I

t was the evening of July 3, and a phalanx of american steel was arriving in Vasteras an hour or so northwest of Stockholm. Pontiacs, Fords, Plymouths, Cadillacs, Chevrolets – pretty much every brand of car ever manufactured on American soil – bumper to bumper into the fading daylight.

Most were pristine, with immaculate chrome and gleaming paint, but some were custom hot rods in candy colours, and a few were wrecks that looked as if they had just been pulled from the ocean floor.

All were headed to the Power Big Meet 2014, which the organisers say is the world’s largest classic-car gathering. This was the 30th anniversary of the meet in its current incarnation – first held in 1978 and moved here in 1984 – and as many as 15,000 vehicles were expected to fill the festival grounds. Disciples of Detroit engineering had driven from all over Europe to gawk at one another’s cars.

It is hard to overstate how much the Swedes love old American cars. Swedish enthusiasts will happily boast that there is more classic Detroit iron in Sweden than

© 2014 New York Times News service

68

in the United States. The Swedish fascination for Detroit slipped over into full-blown obsession a long time ago.

Thousands of vintage cars are imported into the country each year, participants here say, in part to satisfy the demand of the Swedish raggare subculture, which is populated by gearheads who have combined the fashion sensibilities of John Travolta in Grease with the drinking habits of a Lynyrd Skynyrd concertgoer. A scan of the crowd confirms that the raggare is as ingrained in the Swedish soul as Ikea and Abba.

Portfolio

69

September 2014

70

Essentials

Motoring

Enthusiasts burn rubber in a 1973 Plymouth Valiant.

“Kjell, how are you going to fit that thing in there?” Oskar Antonson shouted to Kjell Svenningsson, a friend who was trying with various degrees of violence to fit a Volvo generator under the hood

A member of Big Block, a “raggare” club.

A collection of Wunder-Baum air fresheners decorates a mirror.

“It’s about being able to not really care,” said Henrik Hjalmarsson, sitting on the hood of his Chevy. Hjalmarsson owns a

of his 1957 Pontiac Bonneville. The car

particularly defeated-looking pilsner, a 1968

had ground to a halt in the muddy roads

Impala with a 1967 front end and a suitably

of a campground.

broken frame. The car was loaded with

Power Big Meet has two official

stickers, many of them Confederate flags.

campgrounds. One has pristine lawns,

The raggare culture has a deep fascination

showers, toilets and most important, no

with the American South.

tendency to transform into an ocean of mud at the slightest drizzle; the other, the much more popular Swine Camp, is no doubt

the pilsner car.

That is a car that looks as if it has

named for the grooming standards of the

suffered decades of cruel abuse. It is rusted

people who choose to stay there.

out, covered with stickers and grime, its

“You need a longer bolt, Kjell,” Antonson

roof, trunk and hood beaten and dented

said. “And washers.” Ignoring the advice,

almost beyond recognition. And if it is an

Svenningsson grabbed a hacksaw and

authentic pilsner, the back end scrapes the

amputated an egg-size chunk of steel from

ground because the frame has been broken

the generator. He shoved the modified

over the rear axle.

piece into place and cranked the starter.

The generator rattled but obeyed. Kjell

However, it is in the guts of a pilsner

slammed the hood. “The car lives in

car where things get really strange. Under

Europe now, so she better get used to

the hood, a true pilsner will have a new or

European parts,” he said.

renovated engine, preferably something

The campgrounds neatly illustrate the

powerful like a 351-cubic-inch Ford V-8.

two cultures of the Swedish Am-car scene.

The axles have fresh brakes, the rust is

The nice camp has shiny, beautifully

rarely more than skin-deep, and the broken

restored cars. Swine Camp, on the other

frame may even be welded solid in its

hand, is the domain of a very Swedish

mangled state. The pilsner is a muscle car

subspecies of the American automobile:

disguised as a beater.

Portfolio

71

“I can spill as much drink and put out

Pontiac Bonneville, a 1938 Ford Deluxe,

world had devolved into the largest party

as many cigarettes on the seats as I want,”

a 1965 Sting Ray or one of the 200-some

in the world.

he said. “But if you look underneath, the

Mustangs sprinkled around the grounds.

car is like new.”

Cherielynn Westrich, famous from her

A stretched Pontiac Catalina Safari, decorated like an American flag,

appearances on Discovery’s Overhaulin’

lurched into gear, slowly navigating the

but explodes during Power Big Meet.

show, where she restores cars with Chip

campground obstacles and motored toward

Some businesses use it as an opportunity

Foose, had finally been talked into coming

town for a final cruise. Country music

to crank up the prices of food and drinks,

to Power Big Meet after hearing her friends

blared from the speakers.

while most locals are happy to take in the

rave about it for years.

Vasteras is quiet for most of the year

spectacle from their lawn chairs.

As roughly 10,000 cars filed in – fewer than the organisers had anticipated but still filling the festival grounds – many

“Sweden is the 53rd state,” Westrich said.

“I’m more of a Georgia Satellites kind of girl,” said the designated driver,

“And Power Big Meet is the biggest and

Frida Sofie Abelsnes, 19, referring to the

baddest car show in the world.”

Atlanta, Georgia-based band. “But this is a

The next day, the festival was winding

country crowd.”

She turned onto the main drag and

owners spent the first few hours sleeping

down. Some partiers headed home, but

on the grass next to their cars. Vendors

most were gearing up for a final night

the America-mobile joined the throng

along a main road sold classic hubcaps,

of Big Meet celebrations. “This place is

of pilsners and restored cars on their

license plates and various knickknacks

unique,” Al Young, a former drag racing

way to town for the final night of Power

whose value seemed to stem only from the

champion, said after receiving the award for

Big Meet. n

fact that they were American. Bleachers

longest distance travelled, having shipped

had been set up, and cars entered in the

his 1973 Plymouth Road Runner from

various categories filed past.

Seattle to the Netherlands.

Steven Gjaerud, 19, had a 1968 Dodge

“The Swedes are crazy about their cars,

Coronet body mounted on a 2007 Charger

and I love the pilsner cars,” he said. “In the

chassis. Mika Droddy has spent most of a

US, classic cars are for old guys who can

year sticking the body of a 1959 Plymouth to

afford to restore them, but these beaters

the frame of a ’79 Ford Bronco.

allow kids to get into restoring cars.”

But most of the cars were not

Later, outside the gas station that served

abominations. In any direction and you

as a staging ground for the night’s partying,

might see something beautiful, like a 1966

the claimed largest classic car meet in the

A couple dance to rockabilly music amid the many classic cars on hand for the Power Big Meet.

September 2014

A 1950s Buick, one of many classic cars.

Essentials

72

History

The GreaT War’s RemindeRs It has been 100 years since World War I erupted, but around Ypres in Belgium the earth is releasing constant reminders, reports Suzanne Daley.

Tyne Cot, the largest cemetery for British Commonwealth forces in the world.

© 2014 New York Times News service

T

he padlocked cage

his tractor ruptured an ageing shell, and

muddy trenches that surrounded this

beside the driveway on the

the explosion sent shrapnel through his

strategically important region are long

Butaye family farm near Ypres

windshield, tearing off a chunk of his ear.

gone and buried. But the earth, in its own

in western Belgium is almost

“You don’t know what could happen,”

way, has become the last witness, coughing

full of rusting bombs again. Since January,

said Stijn Butaye, 26, who has built a small

up constant reminders of a bloody and

Stijn Butaye has collected 46 mortar shells

museum beside the barn with hundreds of

relentless war that would demolish empires,

on his family’s 40 hectares, World War I

items – including shoes and eyeglasses and

leave at least 8.5 million soldiers and seven

munitions he found among the sugar beet

razors and a perfectly preserved gas mask –

million civilians dead, and produce legacies

and potato fields, sometimes with the help

that he has found on his family’s property.

that continue to play out today.

of his metal detector.

“We just use that land for grazing the cows.”

Butaye’s father, Luc, won’t even plough

It has been 100 years since World War I

Around Ypres, the Allies and the Germans fought for nearly four years in a marathon

two of his fields for fear of what the blades

erupted in these parts. The men who

slugfest that produced some of the war’s

might hit. Not long ago, a neighbour riding

survived the thousands of kilometres of

most famous and deadly battles. It was here Portfolio

73

that the Germans first used chlorine and

Students at the end of the daily Last Post ceremony at the The Menin Gate Memorial to the Missing.

mustard gas on Allied troops. Yet neither side ever made much headway despite artillery barrages so fierce and long that they wiped away roads and villages, leaving kilometres in which not a building or a tree or a blade of grass was left.

The area became a battlefield when German forces wheeled north after being stymied in their initial drive on Paris in the war’s opening months in 1914. After that, the conflict shifted toward Belgium as the Germans tried a flanking manoeuvre and the Allies raced to protect their control of the vital French seaports of Calais and Boulogne. There, along a front stretching southward from the Belgian coast, the opposing armies settled in, turning fertile

Tour guides Trautmann Jorg, left, and Fisher Oliver at a bar outside of Ypres.

farmlands into nightmarish killing fields.

Experts say that in one particularly intense three-month campaign in 1917, known as the Third Battle of Ypres, or the Battle of Passchendaele, the British alone fired more than four million shells.

In the end, more than 500,000 men had been killed or wounded, and the constant shelling had turned the landscape into a lifeless swamp. Up to 30 per cent of the artillery shells fired never went off, experts say. Some were duds, but many simply slid deep into the mud without exploding.

Over the years, many of those shells have begun to rise, some appearing even in fields that have been ploughed many times before. Most years, there are two or three injuries from World War I munitions in Ypres and the surrounding villages. In

The land here still holds so many explosives that almost every construction project poses a danger.

March, two workers were killed and a third

The land here still holds so many

the rich Flanders fields. Some committed suicide when they saw what had happened to their farms and villages. But others simply went to work rebuilding, relying heavily on German war reparations, which arrived by train in the form of fruit trees and cattle.

seriously wounded while handling a shell at a construction site.

refugees began returning, hoping to farm

The detritus of war was everywhere, The Ypres Salient was only one part of

and the simplest thing to do was to fill the

the Western Front, which ran from the

trenches and rebuild. But the war could

explosives that almost every construction

Atlantic coast across the north of France

not be swept away so easily. Many markers

project poses a danger. Every turned

to Switzerland. In France after the war,

remain. Cows graze next to German

spade has the potential to unearth not just

many of the battlefields and destroyed

bunkers and drink from shell craters that

munitions but bones, some carefully laid

villages were declared part of a red zone,

are now watering holes. In aerial shots,

to rest in full uniform, others blown apart.

with access prohibited, left alone to turn to

the outlines of the trenches can still be

A local highway stands half finished; work

forest. But Belgium, historians say, was too

seen because the vegetation grows greener

ended abruptly because the bulldozers

small to afford the luxury of abandoning so

depending on what lies below.

began uncovering graves, and the British

much land.

government quickly objected to the project.

September 2014

The war had barely ended when Belgian

Some experts say that it is time to do more to rid the land of the war’s effects,

74

Essentials

History

Artillery shells from World War I on display at the Memorial Museum Passchendaele 1917.

Stijn Butaye uses a metal detector to locate old War World I munitions on his family’s farm outside Ypres.

particularly by detecting unexploded shells.

mostly because digging up the shells may

half as much. In recent years, the Belgian

Marc Van Meirvenne, a soil expert at Ghent

change the soil composition, bringing up the

government has passed laws preventing

University in Belgium who has studied the

blue clay that is metres beneath the surface.

amateurs from digging.

Ypres region, says it has unusually high

Most of them, like Butaye, have a working

levels of copper and lead, a consequence

knowledge of World War I munitions,

interest in the war today than there was

of the shells and the lead ball shrapnel

easily identifying whether they came from

20 years ago. Tens of thousands of British

inside many of them, though probably not

German or Allied forces and how likely they

schoolchildren come here every year, as do

sufficient to be a health hazard. However, he

are to explode. Both Belgium and France

thousands of the soldiers’ family members

said, ground-penetrating radar could easily

have specialists assigned to collect the shells.

and history buffs, contributing about ¤40

be used to spot shells.

The Belgian unit near Ypres collects over

million – nearly $54 million – a year to

90 tonnes of munitions a year. A French

the local economy. Joseph Verschoore,

unit working near Verdun collects about

the deputy mayor of Ypres, said that even

But many farmers are not interested,

Officials in Ypres say there is more

Germans were beginning to show interest.

Rusting bombs fill a padlocked cage on the property of Stijn Butaye.

“I think before they were not always at ease,” Verschoore said. “They were maybe afraid that the people here were still angry.

But now there is more understanding that there was a regime there, and it was not very good for their people, either. Many of the German soldiers had no idea why they were here.”

But some bitterness lingers. Stijn Butaye’s grandfather, who bought the farm in 1960, was eager to rid it of any signs that the Germans had once camped there. He tried to blow up a bunker near the house, and objected to his grandson’s hobby.

“Whenever he takes a picture of the house, he cuts the bunker out,” Butaye said.

“He hates that it was a German bunker.” n Portfolio

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76

Essentials

Agriculture

Apple of

PePsi’s eye The juice extracted from cashew apples could be the next coconut water if Pepsi has its way, reports Stephanie Strom.

Portfolio

77

W

hen the cashew

is abundant in tannins that impart an

harvest starts in

acrid taste.

“I thought it was a little strange that

Ratnagiri, the orchards

they wanted to buy cashew apples - but

clinging to the lush,

wrinkled hills are blanketed by a brilliant

I didn’t like to question a new source of

yellow, orange and red carpet, created after

money,” said Sanjay Pandit, who together

farmers pluck the nut and toss its stem to

with his father, Hanumant Pandit,

the ground. There, the cashew apples, as

cultivates about 300 cashew trees in the

the stems are known, quickly rot, except

village of Kondye.

for a few used to brew a local spirit called

Brazilians are the biggest consumers of

feni that is popular in neighbouring Goa.

the yellow and red apples today; a handful were featured in FIFA’s advertising for

This season, however, the carpet will be thinner because Pepsi is betting that the

the World Cup. But Brazil, a major global

tangy, sweet juice from cashew apples can

source of cashew nuts, processes only

be the next coconut water or açaí juice.

about 12 per cent of its crop of cashew

“Coconut, pomegranate and lime

apples annually because of the challenges

juices are popular, but affordability is

posed by their short shelf life, according to

becoming a major issue,” said V.D. Sarma,

research by the African Cashew Alliance,

vice president for global procurement at

an industry trade group that is also looking

PepsiCo India. “So we are always looking

for ways to cash in on cashew apples.

Cashew juice also shows up in various

for new juice sources that are locally produced to help bring prices down for us

local products around the world like

and for consumers.”

Cashewy in Thailand, which is promoted by its producer as “the beverage of gods.”

The demanding demographic group known as millennials, as well as new

Nutrition and health websites extol its

consumers among the world’s emerging

high vitamin C content, and there are even

middle class, have a restless appetite that

claims that it helps burn fat and enhances

is driving food companies to experiment

sexual performance.

Pepsi stumbled across the fruit in Brazil

on a grand scale with flavours and ingredients whose appeal until recently

a few years ago, when Mehmood Khan, its

were largely local.

global head of research and development,

Quinoa, a nutty, protein-dense grain

was working there to get the company’s

that was a staple of the pre-Colombian

coconut water business up and running.

A local supplier took him to a cashew

diet in the Andes, is now in short supply, thanks to the voracious appetite of global

interest in their cashew apples. While

orchard, where he saw the colourful apples

consumers. Chia, a seed rich in omega-3

the cashew is a favourite nut worldwide,

and wondered how they could be used.

fatty acids, can be found in everything

the so-called apple from which each

The big stumbling block, Pepsi learned, to

from smoothies to muffins.

nut grows is almost always left on the

any commercial use was the fruit’s quick

ground or thrown away, where it begins to

fermentation. “That’s a risk for us – we

into a mixed fruit juice drink sold in India

ferment within 24 hours of picking. And

can’t have Tropicana with alcohol in it,”

under the Tropicana label, replacing more

the juice by itself, while highly nutritious,

Sarma said.

Starting next year, cashew juice will go

expensive juices like apple, pineapple and

© 2014 New York Times News service

banana. Eventually, the company hopes to add it to drinks around the world. “We can tell a story around it,” said Anshul Khanna, senior manager of juice and juice drinks at PepsiCo India. “The cashew apple is exotic and appealing, and we think it is a premium product.”

Farmers here are a bit baffled by Pepsi’s September 2014

Pepsi stumbled across the fruit in Brazil a few years ago, when Mehmood Khan, its global head of research and development, was working there to get the company’s coconut water business up and running.

78

Essentials

Agriculture

of rich topsoil that was being washed away by heavy rains. Now India is one of the world’s largest cashew producers.

Some three-quarters of the roughly nearly 600,000 tonnes of nuts grown here come from small farmers with orchards of one to two hectares, or 2.5 to five acres.

Farmers, who harvest between late January and April, typically store the nuts and sell them off as they need the income, making cashews virtually the equivalent of cash. But historically they have received only a fraction of the nut’s final value, thanks to a distribution system thick with middlemen. Acceso is replacing some of that network, buying nuts at a higher price, Hanumant Pandit fills a trench adjacent to a cashew tree with water on his farm.

turned to the Clinton Foundation, which had expressed interest in the company’s efforts to incorporate small farmers into its global supply chains. Small farmers supply it with chickpeas in Ethiopia and corn and sunflowers in Mexico.

“We work with them to improve cultivation and yields and offer them better prices for their nuts, as well as create a market for their cashew apples,” said Govind Ramachandran, general

“We work with them to improve cultivation and yields and offer them better prices for their nuts, as well as create a market for their cashew apples.”

The Portuguese introduced cashew

Foundation last December to carry out the

trees in the 16th century in the region

programme in India.

around Goa, hoping to stem the erosion

Hanumant Pandit holds a cashew fruit and nut on his demonstration farm.

participated in the Acceso programme, selling their apples to it for 2.5 to three rupees a kilo. (Every kilo of nuts yields five to six kilos of cashew apples.)

Last season, the farmers harvested roughly 100 kilos of fruit a day, which had to be collected immediately from remote orchards that often are draped down steep ravines. The cashew apples were transferred to Exotic Fruits Pvt. Ltd., a fruit processing plant in the city of Ratnagiri, where they were washed,

manager of Acceso Cashew Enterprise, the business established by the Clinton

now was essentially garbage, the cashew apples. Roughly 500 small farmers here

To help improve the farming, collection and rapid processing of the apples, Pepsi

as well as creating a market for what until

pressed and strained to make juice.

Farmers in the programme attended a two-day workshop, where they were

Frozen cashew fruit used for experimentation at Exotic Foods Ltd. in Ratnagiri, Maharashtra, India.

Portfolio

Essentials Agriculture introduced to the Vengurla 4 and Vengurla 7, two new, more productive varieties of cashew trees that were developed by Indian government researchers. They also learned techniques and practices to help increase the yields of existing trees, many of which are native varieties. Farmers can, for instance, dig trenches around their trees and create terraces to help trap and distribute monsoon rains that would otherwise simply run down the hills.

More than a dozen growers interviewed said that sales of the cashew fruit last season had raised their incomes by as much as 20 per cent. One farmer, Ravindra Agare, said he had been able to buy schoolbooks for his children. The two sons of another farmer, Harshad Mukadam, are taking English lessons

A truck carries cashew saplings from a nursery.

that he said he could never have afforded

and pruning. After he adopted these

cashews stopped by the demonstration

before. “It makes me happy that I can do

techniques, he was able to sell 200 kilos

orchard Acceso created at one of his

this for them,” Mukadam said.

of cashew apples to Acceso, earning more

plots and issued dire warnings. “Some

than 400 rupees, part of which he used to

of them try to scare me, saying that

has even encouraged farmers like Pravin

pay the men who dug his trenches. With

Acceso will take my land away or that

Shirke, who did not participate in the

the remainder, he will invest in more

it won’t pay me,” he said. “I tell them

programme, to adopt some of the new

trees, he said.

my yields have increased and that I’m

The potential for additional income

techniques. Shirke put trenches around

Not everyone has embraced the plan.

several of his trees and started weeding

Pandit said several neighbours who grow

making more money, but some of them still aren’t convinced.” n Manoj Solanke walks through his cashew farm.

September 2014

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getty images

Culture

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Keeping a Historic Ship AfloAt The SS United States, which set the record for an eastbound crossing of the Atlantic in 1952, is likely to be scrapped if plans for its redevelopment fail, reports Jon Hurdle.

O

nce upon a time, it carried princes and potentates across the Atlantic in high style and at great speed. Then it was towed ignominiously to Ukraine where the partitions and bulkheads that once divided

luxurious cabins and glittering ballrooms were torn out to remove hectares of asbestos. And since 1996, the steamship United States

has been tied to a Delaware River pier beside a South Philadelphia shopping mall, while chunks of paint peel off its black hull and red-andwhite funnels.

Now, the nearly 302-metre-long ocean liner that plied the Atlantic from 1952 until 1969 is the focus of what its financially struggling owner, the SS United States Conservancy, says is a final effort to save it from the scrap yard.

Saying the ship could be only months away from being broken up, the conservancy is in talks with three developers about its potential to

Š 2014 New York Times News service

become a hotel, museum, shopping and restaurant mall, entertainment

September 2014

complex, conference centre, educational facility, or some combination of all options for reuse.

Conservancy officials say the ship has about 46,452 square metres of usable space that represents both a business opportunity and a means of rescuing the historic vessel, 45 years after losing its trans-Atlantic market to commercial aviation.

Scrapping the ship would destroy a piece of American social history

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class passengers, who saw first-run movies

its commercial potential would be most

and could listen to several orchestras.

likely to be realised.

He said that he and his brother were

McSweeney said that the conservancy

required to wear suits and ties at dinner,

– which bought the ship from Norwegian

and passengers dressed smartly even when

Cruise Line for $3 million in 2011 – also

strolling the decks. “There were no shorts,

considered locating the ship in Miami,

and no baseball caps,” he said.

Baltimore, Boston, Philadelphia and other

The ship, which on its maiden voyage in

cities but that none matched New York.

July 1952 set the record of three days, 10

“New York makes the most sense because

hours and 40 minutes for an eastbound

the market density is there,” he said.

crossing of the Atlantic at an average speed

The ship’s future may have parallels with

of about 71 km/h, was built for speed

the Rotterdam, another liner that sailed the

because it was meant to be a troop carrier if

Atlantic for Holland America Line from

needed. The Pentagon paid two-thirds of its

1959 until 1997, and is now a mixed-use

$78 million construction cost.

centre in its home port.

The high standards of its construction

After leaving service as a liner, the

have ensured its structural viability, said

Rotterdam was bought by a Dutch

Susan Gibbs is the executive director of the SS United States Conservancy.

Dan McSweeney, managing director of the

government-backed company for ¤250

SS United States Redevelopment Project.

million and converted into spaces for

and an engineering landmark that still holds

He said tests on the hull indicated that its

businesses. Since 2010, it has been occupied

the record for the fastest trans-Atlantic

steel retained 92 per cent of its integrity.

by shops and restaurants, a theatre, a

crossing by an ocean liner, said Susan

Redevelopment is expected to cost $170

meeting centre and a hotel, which together

Gibbs, executive director of the conservancy

million to $300 million, depending on the

attract about 500,000 visitors a year,

and granddaughter of the ship’s designer,

combination of uses, and “seed capital” of

according to Casper van Hooren, a former

William Francis Gibbs. “There is no other

about $15 million will be needed for an

investor in the project and now an adviser

American ocean liner left,” she said in an

initial phase of the project, McSweeney said.

to the SS United States Conservancy.

interview. “This is the last one.”

Putting the ship back into the cruise market

Gibbs likened the ship to national icons like the Liberty Bell or the Chrysler Building, but said it had somehow failed

Van Hooren said the Rotterdam’s

could cost as much as $1 billion, which is

businesses overall are profitable, and he

too expensive to contemplate, he added.

predicted that the liner United States

He declined to identify the potential

to seize the public imagination, despite

developers but said all would move the ship

its presence on the National Register of

to New York, its former home port, where

would succeed as a result of New York’s many tourists.

The ship may move to a location in

Historic Places.

Henry Goldsmith, who sailed on the ship in 1952 when he was 11 years old, and then again in 1958, said he had given money to the conservancy to help keep the ship afloat. Goldsmith, a retired construction manager, recalled the high standard of service, food and entertainment for first-

The first-class ballroom on the SS United States.

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Brooklyn within four to six months if negotiations with the conservancy succeed, according to a person with knowledge of the talks. The person said he was optimistic that a deal would be done, and that the ship would be reborn as a commercial and cultural centre.

While the conservancy has considered big-city locations, another team of developers wants to move the ship to Chester, Pennsylvania, a city of about 33,000 people south of Philadelphia. There, the vessel would become a hotel for a casino and could also include restaurants, shops and a museum. Joe Henwood, a former manufacturer who heads a development

The stern of the SS United States in Philadelphia.

team called the Binnacle Group, said the ship’s presence in Chester would provide an economic lift for a city with high rates of poverty and crime.

Henwood said he had six to 10 “very, very serious” investors who are ready to back the project, which he estimated would cost $300 million to $400 million. But he said it was uncertain whether the conservancy was willing to sell, or at what price.

Henwood criticised the conservancy’s plan to move the ship to New York, saying the city’s high costs would undermine the project’s viability. He also said it was wasting millions of its supporters’ dollars, and violating its role as custodian of the

The SS United States’ last remaining propeller on the ship.

vessel by selling parts of the interior to meet operating expenses. He said he

Simply keeping the ship tied up in

by notable figures such as the Duke and

planned to wait until the conservancy’s

Philadelphia costs at least $60,000

Duchess of Windsor, Harry Truman and

redevelopment plans failed, then he would

a month, and that has drained the

Rita Hayworth are now marked by low

consider buying the ship from a scrap yard

conservancy’s resources to the point

dividers in the steel floor, while the ballroom

before it was cut up.

where redevelopment is the only option,

where Duke Ellington once played for first-

Gibbs said.

class passengers in tuxedos and ball gowns is

Gibbs defended the group’s plan. “The size, density and diversity of the market in

In June, the group was thrown a financial

a dimly lit shell overhung with disconnected

New York is significantly more attractive

lifeline by Jim Pollin, a former cruise

pipes and wiring. Without the walls and

and can generate the highest revenue for

industry executive, who donated $120,000

partitions that created the environment for

investors,” she said. She also said 82 per

to prevent the conservancy from scrapping

passengers to sail between America and

cent of the conservancy’s budget went to

one of the ship’s propellers and pledged

Europe in style, the liner United States offers

costs that include pier rental, maintenance

$100,000 in matching contributions.

many possibilities for developers to create

and insurance. She added that the group

But the ship’s survival without

had generated income by selling metal

redevelopment is still only measured in

from some areas of the ship that were not

“months,” Gibbs said.

historically significant.

September 2014

Inside the ship, cabins once occupied

businesses that will allow the ship to survive, McSweeney said.

“We want this to be a showcase for American ingenuity.” n

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Stepping into the Frame L’Estaque, which used to be a small fishing village close to Marseille, inspired painters such as Paul CÊzanne, Georges Braque and Pierre-Auguste Renoir, reports Rachel Donadio.

The cathedral of Marseille, and to the right, the Museum of European and Mediterranean Civilisations, called the MuCEM. Portfolio

© 2014 New York Times News service

85

Havre, on the English Channel.

It was Paul Cézanne who went

rocks, the forest-green scrub, all becoming

to L’Estaque first, in 1864. He escaped the

new versions of themselves, transformed

grey dreariness of Paris and later avoided

by his vision. “It’s like a playing card. Red

One century was giving way to the

army conscription in the Franco-Prussian

roofs against a blue sea,” Cézanne wrote of

next. Braque had reshuffled the playing

War of 1870 in this sunny shorefront

L’Estaque to the painter Camille Pissarro

cards, making the familiar landscape

village outside Marseille. From the

in 1876. “There are olive trees and pines

even more unfamiliar. With his brush,

windows of a rented house next to the little

that always keep their leaves. The sun is so

the boxy roofs became puzzle pieces,

church on the hill, he could look out on the

frightful that it seems as if all the objects

the arches of the local viaduct a study

tile rooftops leading down to the harbour,

are reduced to silhouette, not only in black

in the contrast between positive

with its fishing boats, and across the wide

and white, but in blue, in red, in brown,

and negative space. By 1908, he had

bay to Marseille, the low, rocky mountains

in violet.”

flattened the windswept trees to the

at its back.

In 1906, Georges Braque went to

That same autumn, Cézanne died.

boundary between the second and third

L’Estaque after seeing Cézanne’s work on

dimensions. Impressionism changed

stroke and every year, the landscape

view in Paris. He stayed five months. “It

to fauvism in Braque’s hallucinatory

changed, the picture plane began to

was in the South that I felt my rapture rise

forests, where solitary walkers lose

dissolve – the rooftops, the sea, the barren

in me,” wrote Braque, who grew up in Le

themselves in oneiric expanses of yellow

He painted intensely. With every brush

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and purple – and then to cubism.

I wanted to see it for myself, this landscape of L’Estaque that I had known from so many paintings over the years,

The harbour and an elevated section of road leading to L’Estaque.

and that I had rediscovered in the Musée d’Orsay and the Pompidou Centre since moving to Paris last year. And so, one weekend this spring, I took a train to Marseille to look around. I wanted, I think, to step into a painting.

But scenes change over time. While Van Gogh’s Arles maintains much of its postcard perfection, and Monet’s gardens at Giverny theirs, L’Estaque, in spite of its significance in art history, is perhaps the least touristic and least romanticised of the locales that so inspired the great French painters. Today, L’Estaque is not the sleepy fishing village that Cézanne and Braque found more than a century ago.

It is part of the 16th Arrondissement of

Seen From L’Estaque, which are now

vivacious Marseille, a working-class area

scattered in museums around the world.

absorbed into the busy larger city, with a

On a lookout point near the Fondation

pretty harbour, one main street lined with

Monticelli, which celebrates Adolphe

shops and cafés, and a dearth of parking.

Monticelli, a lesser-known Marseille

I was glad to be there anyway. After all,

painter who died in 1886, a group of young

what is travel – or life, for that matter

men were having a makeshift barbecue.

– but a continuing negotiation between

Their car radios played Arabic-inflected

expectation and reality?

hip-hop. On the beach below, people were

A friend and I arrived at midday on a lazy Saturday. In the cafés by the

sunning themselves on the rocks.

When Cézanne was here, there were no

In the end, the L’Estaque of the artists may outshine the L’Estaque of life.

But the place still lingers in my mind.

I revisit the paintings in the museums.

harbour, people drank coffee or stirred

doubt 19th-century locals also picnicking

glasses of cloudy yellow Pernod. There

nearby. But the artist wilfully left out

were market stalls with cheap socks,

the quotidian, the bustling harbour,

he reached his conclusions. Every painter

housewares and towels, and a flea market

instead shaping the landscape to his own

had a different perspective. In 1908, Raoul

where women in abayas browsed for

imaginative needs.

Dufy arrived to paint with his friend

bargains. We settled into a waterfront

“I have a lot of good points of view, but

Braque, after seeing Braque’s L’Estaque

restaurant and ate fish and got drowsy on

that doesn’t exactly add up to a theme,”

works displayed in Paris. Then came

dry rosé, watching boats bobbing in their

Cézanne wrote of L’Estaque to his friend

the Fauvist André Derain, who painted

moorings. Off a nearby dock, young boys,

Émile Zola in a letter.

colourful, happy harbour scenes that make

tanned and fearless, somersaulted off the

Cézanne’s look melancholy in comparison.

rocks into the water, like so many of their

In 1882, Pierre-Auguste Renoir came

kin around the Mediterranean, over so

to visit Cézanne, and the two painted

afternoon or twilight jaunt, by boat, from

many centuries.

together. Renoir’s Rocky Crags at L’Estaque

Marseille. Ferries to L’Estaque leave every

of that year shows the hillside and

hour from Marseille’s Old Port, a deep

landscape opens up to a wide view of the

vegetation in his characteristically fuzzy

harbour that has been in continuous use

harbour. You can see a small island, and

style. Cézanne always stayed more angular,

since the days of the ancient Greeks. The

the hills east of Marseille, bluish in the

more intense. He painted like a man

boat pulls out of the harbour and rounds

distance, just as they appear in so many

working out a mathematical problem. Each

the bend by the MuCEM – the Museum of

of Cézanne’s landscapes, Gulf of Marseille

brush stroke, each painting, reveals how

European and Mediterranean Civilisations.

Up the hillside on the edge of town, the

The best way to visit L’Estaque is as an

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This picture and right: L’Estaque’s viaduct was immortalised by the cubist Georges Braque.

Cezanne’s famous painting The Gulf of Marseille seen from L’Estaque.

Pierre-Auguste Renoir, a leader in the Impressionist style, visited L’Estaque in 1982.

A neighbourhood of L’Estaque, immortalised by Paul Cezanne.

trim. There were rusted cars in the hills

Today, some of the best views of

L’Estaque is only a 10-minute drive

L’Estaque are from the roof of the

from downtown Marseille, and a half-

underneath it. The boxy houses now have

MuCEM. With its dark cement latticework

hour trip by ferryboat, part of the city’s

satellite dishes on their roofs.

facade meant to evoke a casbah, the

transportation system. I did both, and

MuCEM is also a study in positive and

I much preferred the boat. As it slowly

may outshine the L’Estaque of life. But

negative space. From the top of an adjacent

neared the shore, I felt as if I were on

the place still lingers in my mind. I revisit

fortress, the MuCEM’s roof stretches just

the verge of entering a painting. One

the paintings in the museums. I think

below the line where the ocean meets

day, it was cloudy, and the dark sky

back to the weekend – to the sun, to the

the shore. In the foreground, a sparkling

against the pale rocky hills really did

crusted sugar on the fried dough, to the

new tower by the architect Zaha Hadid

evoke a landscape by Cézanne. The

ferries headed for the Maghreb, to the

swoops up into the air, reflecting the light

viaduct painted by Braque stood out

rocky coastline. The boat glides across the

and straddling the highway running west

against the hillside.

harbour toward the village. Marseille is at

toward L’Estaque. Along that road, a

My friend and I went to see the viaduct.

In the end, the L’Estaque of the artists

our back, the limestone hills approaching

billboard for Panzani Zakia halal lasagna

Its tall arches were instantly recognisable

in the distance. There is a cool breeze.

fills the entire side of a tall building. Huge

from Braque’s cubist paintings. Someone

The ocean opens up before us. It is filled

ferries bound for Tunisia and Algeria sit in

had spray-painted the word “Orage,” or

with possibility – and with the memory

the harbour.

storm, in white bubble letters with black

of possibility. n

September 2014

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Other Business

Buried Treasure No Joke When a Normandy homeowner told

“It’s an unusual and rare story,”

the workmen extending her property

a police source told Paris Normandie

to “let me know if you find any

newspaper. “While they were

treasure”, she was only joking. The

working in the grounds of the

three builders, however, had a secret.

house building an extension, the

Unbeknown to their employer, they

bucket of their small digger hit

had indeed found a cache of gold

something hard.”

ingots and coins buried in the garden

On closer inspection, the men

– and allegedly sold the treasure

found 16 golden ingots weighing

trove for ¤900,000.

1kg each and 600 gold $20 coins

Police have now charged the

weighing 33g each, dating from

workmen with theft and a specialist

1924-27, that appeared to have lain

collector of money with receiving

hidden in glass jars buried in the

stolen goods.

ground since WWII.

Superheroes Fight Back After a spate of arrests and bad publicity, the costumed characters who pose for tourist photographs in New York’s Times Square in the hopes of a cash tip have formed an association to preserve a livelihood that has come under increasing scrutiny.

Dozens of people dressed as SpiderMan, Batman, Elmo, Mickey Mouse reuters

and other children’s favourites, roam the crowded sidewalks and pedestrian

Vintage Cars Smash Records

plazas around Times Square each day,

A $38.1 million Ferrari 250 GtO Berlinetta

ago. the new high is a 132 per cent increase

city’s visitors.

led the annual parade of classic car auctions

from 2011, when a 1957 Ferrari testa rossa

in California to a record tally of more than

prototype fetched $16.4 million at Gooding.

$350 million.

the record price for a car is held by a 1963

beckoning toward passing kids and their camera-toting parents. But city officials from the mayor down have painted them as pests who harass the The new association wants to fight back against that image, according to Yamil Morales, one of the group’s

Ferrari 250 GtO racer, which sold for $52

organisers. They are calling themselves

with other high-end collectibles, including art

million in a private transaction in October. the

the Association of Artists United for a

and wine, as wealthy individuals’ appetite for

previous global auction record was achieved

Smile, a name chosen to reflect their

alternative investments grows. the price for the

by a 1954 Mercedes-Benz W196r Formula 1

claim that a tourist’s happiness is no

red Ferrari 250 GtO smashed the previous

racing car that fetched $29.7 million at

less important than any tip he or she

global auction record of $29.7 million set a year

Bonhams last year.

might give.

the values of vintage cars have risen along

Portfolio

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