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February 2011 $ 8 per copy 12 months subscription

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CONTENTS February 2011

2011 a good year for manufacturers




he financing will take care of the next nine aircraft flydubai is due to receive and secures all the airline’s financing requirements until June 2011.


hrough all the economic turbulence that has occurred in the world of late, Asian countries and businesses continue to forge ahead. In our part of the world we suffer the storms and tsunamis, rising food prices and inflationary circumstances common to today’s globalised world. Asia Manufacturing News will this year bring you the stories of the manufacturing heroes across Asia. The companies which are continuing to dream the dream, develop the new products and find new markets for them. And there are opportunities everywhere as you can read about in our story on the demand for motorcycles in China over the next few years. Who wants to manufacturer 55 million motorcycles by 2014? Come on, put your hand up, this is a golden opportunity and your time has come! Even the web brings its consternations and issues. Google isn’t popular in China and the competition between Google and Chinese internet operators is no different from a lot of the competitive issues between China and the USA when it comes to business. Take, for another example, the Chinese currency. Will it go global? Is this idea realistic? Is it another arm wrestle with USA or a natural growth path? In 2011 we want to hear of your success stories – the technology your company has made, the new idea which is going to change the world. Your company is important we want to know where you are going in 2011. – Doug


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ew partners will help Chinese automotive manufacturers increase the perceived quality of their vehicles.






espite the best efforts of an international naval police force patrolling the Gulf of Aden and nearby seas, gangs of ruthless criminals can still capture highly valuable cargo ships and hold them to ransom.










Asia Manufacturing News is published bi-monthly and offers the reader business information and news. Asia Manufacturing News welcomes editorial contributions and encourages readers to share their reflections and views with us. Asia Manufacturing News uses information provided in good faith. We give no guarantee of accuracy of the information. No liability is accepted for the result of any actions taken or not taken on the basis of this information. Those acting on the information and recommendations do so entirely at their own risk. Managing Editor: Doug Green phone: 0061 06 870 9029 Advertising Manager: Max Farndale phone: 0061 06 870 4506 Web Master: Dan Browne. SUBSCRIPTION: NZ $96 per year for the printed version. NZ $48 per year digital. Subscription payment or general contact can be made to: Media Hawkes Bay Ltd, PO Box 1109, Hastings, New Zealand. or Please email or fax us your credit card details. Fax: 06 878 8150 Or by posting a cheque to the above address. Digital Subscription payment available at: Single copies NZ $8.00




Demand for motorcycles to approach 55 million units in 2014


emand for motorcycles in China will increase 7.6 percent annually to 54.9 million units in 2014. Electric motorcycles are expected to surpass gas motorcycles to become the leading motorcycle type sold in China.

These comparatively new products will account for over three-fourths of aggregate motorcycle market growth. Gaspowered internal combustion engine (ICE) motorcycles will also record solid growth, helping to strengthen China’s position as by far the world’s largest motorcycle market. ICE motorcycles and electric motorcycles, while collectively referred to as “motorcycles,” tend to appeal to different types of consumers. Different factors drive growth for each type of motorcycle. These and other trends are presented in Motorcycles in China, a new study from the Beijing office of The Freedonia Group, Inc., a Cleveland-based industry research firm. Sales of traditional gas motorcycles will increase 3.9

percent annually to 23.3 million units in 2014. Gains will be driven by increasing economic activity and rising personal income levels in the country’s rural and semi-rural regions, which are and will remain the most important markets for these vehicles. Government rebates for purchases of ICE motorcycles by rural residents as part of the “Automobiles and Motorcycles to the Countryside” program will also stimulate demand. However, restrictions and even outright bans on ICE motorcycles in many Chinese cities will prevent sales from expanding at a faster pace. Cruisers are the most popular model type among Chinese consumers, representing 43 percent of gas motorcycle sales in 2009. However, their position in

the ICE segment has been undermined in recent years by the diversification of motorcycle offerings in China. Going forward, trikes and sidecars will see demand expand at the fastest rate of any ICE motorcycle model type. The market for electric motorcycles in China is expected to grow 11.0 percent per annum through 2014 to 31.6 million units. Demand for these newer products will continue to expand at a rapid pace through the forecast period, as increasing numbers of urban dwellers turn to electric motorcycles for their transportation needs. Improvements in vehicle durability and in battery power and longevity have allowed electric motorcycles to meet an important need among urban dwellers seeking to upgrade from pedal bicycles but unable to afford automobiles. nextSTEP Visit: The Freedonia Group, Inc.

Large growth in equities for Chinese high net worth individuals CHINA The share of total funds that Chinese high net worth individuals hold in equities is set to increase strongly, according to the latest research. Chinese high net worth individuals (HNW) currently hold a lower proportion of fund in equity compared to peers in the Asia-Pacific region. Datamonitor research* shows that this will change, with strong growth in equity holdings forecasted over the next two years. “Chinese HNWs have a large proportion of their wealth as cash

or near-cash products. This will change over the next two years, with equity holdings becoming the most important component of Chinese HNW portfolios instead. This movement of funds will provide opportunities for the financial services industry,” says Petter Ingemarsson, senior financial services analyst at Datamonitor. Equities currently constitute a fifth of Chinese HNW portfolios, but will in two years have reached a proportion of 46%. This is a higher percentage than in other countries in the region. The

Datamonitor survey was carried out in China, India, Taiwan, Singapore and Hong Kong. The main driver for the growth in equity holdings is a growing number of Chinese HNW looking for higher risk investments. Chinese HNWs are becoming more polarised in their risk attitudes. Around half of HNWs in China will have a significantly higher appetite for risk in two years, which contrasts strongly with the broader APAC area. However, a fifth of Chinese HNWs are expected to have a significantly lower appetite for risk




Goodman signs MOU to develop premier business and logistics hub in China


oodman Group has announced that it has signed a Memorandum of Understanding (MOU) with the Langfang Municipal Government to participate in the development of a premier business and logistics hub for the greater Beijing-Tianjin area in northern China.

The key points relating to the MOU are: ➠ Significant mixed use development project over five square kilometres, which is expected to be delivered over the next seven years ➠ Goodman will participate as co-ordinator and master planner for the project and will take a fee for service role ➠ Goodman expects to generate fee income over the life of the project and will also consider making further investments for itself and its investment partners in the development of logistics and business park product on the site on a case by case basis. Over the next seven years Goodman will work jointly with its affiliates to develop a five square kilometre parcel of land into an international standard, environmentally friendly mixed use business park. This will consist of offices and modern logistics facilities and will be co-located with residential housing and associated amenities to create a sustainable community. Mr Greg Goodman, Goodman Group CEO said, “As the strategic partner of Langfang and the master planner of the park, Goodman will use its worldwide expertise in business park development, master planning and property management to

develop a comprehensive and sustainable logistics and business hub to cater to the needs of modern day business. It will also provide tremendous opportunities for local job creation.” “Goodman will draw upon its global partners to introduce international investors and banking groups to provide full scale financing support. This provides the Group important access to development land in a capital efficient manner and allows Goodman to promote the project and development in China to international customers,” he added. Langfang occupies a key position between Beijing and Tianjin and is within the Hebei Province. Its proximity to transportation networks including rail, airports and road underscores its importance as a logistics hub. Often called “China’s Silicon Valley”, Langfang is set to further benefit from plans for a high-speed railway link between Shanghai and Beijing, with the travelling time between Beijing and Langfang reduced to 10-15 minutes. Extensions to the Beijing ring road network will further enhance Langfang’s ability to support continued economic growth in northern China. The MOU with Goodman will strengthen the delivery of

international best practice in project development, planning, sustainability and logistics management in China. It signifies a concrete step towards enhancing the expansion of the local property development and logistics industry. Goodman’s approach to sustainability was one of the key factors which attracted the Langfang Government to Goodman as they considered the Group to be well positioned to help them deliver on their vision of creating a model sustainable city. Goodman’s Chief Executive Officer, Greg Goodman said, “This announcement, which has been made possible through the strength of our cooperation with the China Investment Corporation (CIC), marks an important step in the continued development of our Asian business and is a further indication of our growing and long-term commitment to the China market. Goodman expects to generate fee income over the life of the project and will also consider further investments for itself and its investment partners in the development of logistics and business park product at the site on a case by case basis.” The MOU builds on Goodman’s successful track record in Greater China, where it manages a total portfolio value of around US$1.6 billion in the key logistics hubs of Pearl River Delta, Yangtze River Delta and Bohai Rim Regions. nextSTEP Visit:




A good story for Google in China hard to find


inding a good story for Google in China is going to be tough, says Andreas Pouros, chief operating officer at Greenlight, a leading independent search specialist marketing and technology firm.

His comments follow on the back of Baidu’s results. These show it continues to dominate the search engine landscape in China. Baidu also reported its advertiser numbers have increased by almost 26% on 2009 levels, reaching 272,000 - a clear sign of the deep chasm in the paid search arena between it and its nearest rival, Google. Since June, Google has curtailed its searchable Web index to comply with China’s censorship laws. According to Pouros, as it now provides fewer results, it cannot post as many advertisements as it had previously. Furthermore, research earlier this year from leading media-focused research, publishing and consulting company, Screen Digest, indicates almost two thirds of search users are happy to use Baidu or smaller Chinese search engines. According to Cyrine Amor, advertising analyst at Screen Digest, Google is losing market share with the problems it encountered lately with the government. Moreover, Google is also about to end its contracts with seven adwords resellers in China. No reason has been provided for this but Ms Amor says this will likely see Googleís share slashed by up to 10-12%. Screen Digest’s figures from earlier this year show Google accounted for 33% share of the Chinese search market, behind Baidu. In paid search, Baidu has been enjoying a healthy lead. In early

2010, Screen Digest estimated total online advertising revenues in China would reach almost 1.5 billion in 2010, with Baidu accounting for the lionís share ($945 million), then Google with $472 million. “By having over 60% share of the search market in China, has Baidu reached the tipping point much as Google had in western Europe, where its growth from 60%-90% share was incredibly rapid, with its competitors largely incapable of closing the gap? Perhaps it has”, says Pouros. What is certain, according to Pouros, is that Google needs a new game plan if it is to achieve the momentum required to catch a clear home grown market leader. Pourous is also an experienced conference speaker and delivers search marketing training courses with the IDM and NMA, as well as carrying out in-house consultancy. Greenlight is a leading independent, award winning search specialist marketing and technology firm, the largest of its kind in Europe and the fastest growing. With over 100 bluechip clients including Santander, Vodafone UK, New Look, Interflora, Co-operative Financial Services, Nespresso and ghd, Greenlight is a leader in the search marketing space, and is recognized worldwide for its commitment to delivering record ROI for its clients and investing in the future of search.

By Andreas Pouros, Chief Operating Officer, Greenlight Greenlight publishes widely read industry reports, original research, speaking at trade events, and delivering a highly respected search training programme in conjunction with the IDM. Founded in 2001, Greenlight is headquartered in London, with offices in New York. Andreas Pouros is Chief Operating Officer at Greenlight. He has been involved in search marketing for eleven years, working for some of the biggest and most prestigious blue chip companies in the world. Andreas is responsible for an international team of Search consultants, developers, programmers, and copywriters. In his role, he provides guidance to a multitude of well-known brands, including Santander, Monarch, Vodafone UK, Thomas Cook, New Look as well as a number of government bodies. Andreas is an established search marketing commentator whose opinions have been published in NMA, Marketing, B2B Marketing, Media Week, Investors Business Daily, Media Post, Wall Street Journal and nextSTEP



the interview

Hypertherm Q&A: Metal-Cutting Trends in Asia A sia Manufacturing News recently conducted a Q&A session with Soo KT, General Manager, Hypertherm Asia.

How would you say the metal cutting industry fared in 2010, globally and regionally? There definitely has been an improvement over 2009 with recovery in the Asian region, but less so in the international scene. Re-stocking of inventories may have contributed in part to the improvement in our business.

Where did Hypertherm see the greatest growth in the region, and what were some notable trends there? China, which recovered quickly after the 2008 financial crisis, is in the forefront of growth. This is not unexpected as China has been the main engine propelling the Asia region onto the recovery path. The construction and agricultural equipment segments have rebounded strongly, fuelled by infrastructure development. The shipbuilding industry, however, is still languishing due to a record number of ships being decommissioned, and marine transportation suffering from the slowdown in US and Europe.

What about other Asian markets that you serve? The entire ASEAN region did well in recovery with some notable exceptions like Thailand that faced political unrest. India, which is more insulated from export orientation and international banking, almost didn’t skip a beat and maintained its contribution to the industry.

Which industries have impacted the metal cutting business the most this past year? Construction and infrastructurerelated developments have both

made significant contribution to our business in 2010.

What significant technological advances did the industry enjoy from Hypertherm this year? We introduced a number of new technologies in 2010. With one of the advancements, businesses are now able to improve cut-tocut cycle time and consumable life, enhancing productivity and operational cost-savings. With another development, the unique combination of our power supply, motion control systems and software help to produce high bolt-hole quality. And most recently, we launched a new highpowered plasma system featuring a patent-pending technology that enables both piercing and cutting of very thick stainless steel and aluminium.

How widespread is the use of oxyfuel, plasma and laser in metal cutting applications across Asia? Oxyfuel is still the dominant metal-cutting method in most emerging markets in Asia and these present significant opportunities for plasma for productivity reasons. With lasers, the market is niche with applications specially designed for precision. But where there are some overlaps between laser and plasma, especially when metal thickness increases, plasma technology has gained an edge. This is because recent technological advancements have enabled cost-savings while preserving cut quality.

What can metal cutting users expect from industry suppliers like Hypertherm in the next few years?

Soo KT, General Manager, Hypertherm Asia

Our users can expect greater performance, reliability and ease of use with new-to-market applications that will further simplify the intricacies of technological integration.

What sustainability and environmentally-friendly initiatives, if any, does Hypertherm undertake, and what’s the impact to-date, as well as the expected effects in upcoming years? As a company, Hypertherm is committed to sustainability with green efforts as one of our corporate priorities in 2011. Product-wise, we will continue introducing new plasma technologies that offer higher performance with lower power consumption, enabling users to do more with less impact on environmental resources.




A*Star musters a line-up of industry players


roundbreaking A*STAR’s Experimental Power Grid Centre (EPGC) on Jurong Island has paved the way for cutting-edge R&D to develop Singapore as a ‘living laboratory’ for smart grid solutions.

Four companies, namely, Rolls Royce, Vestas, SP PowerGrid and CEI Contract Manufacturing entered into strategic partnerships with the Agency for Science, Technology and Research (A*STAR) to develop smart grid and distributed energy solutions. This was announced at the groundbreaking ceremony of its smart grid research facility of the Experimental Power Grid Centre (EPGC) by Guest-of-Honour, Mr Ravi Menon, Permanent Secretary, Ministry of Trade & Industry. The technologies and solutions being jointly developed will form the key components to be integrated into the intelligent grid system. Said Mr. Lim Chuan Poh, Chairman, A*STAR: “Smart grid R&D is critical to transforming Singapore into a smart energy economy and EPGC is an important enabling infrastructure that will bring us a step closer to realising an intelligent national energy grid. With this infrastructure in place, Singapore will be well-positioned to take R&D in energy solutions to the next level.” He added: “Innovation and development of energy technologies are vital to the growth of the global smart grid industry, which is expected to be worth US$187 billion by 20151. As Singapore moves towards its goal of becoming Asia’s Innovation Capital, the EPGC will provide an innovative research platform for public-private partnerships in the emerging area of energy technologies. We are pleased to have garnered strong interest from a mix of MNCs and local enterprises to collaborate with us in this endeavour. This is a

strong endorsement of the potential of EPGC. We hope to anchor more companies to further shape the R&D agenda and to translate research into useful applications for economic goals.”

About the EPGC When completed in 2011, the EPGC research facility will be the first experimental smart grid research facility of its kind in South-east Asia. It will be built by a consortium led by Meiden Singapore. Together with the Command and Control Centre in Fusionopolis, the EPGC will be a world-class research centre to usher in new smart grid technologies for intelligent and decentralised power distribution, interconnection and utilisation. Commenting on the R&D conducted at the centre, Associate Professor Ashwin Khambadkone, Programme Director, EPGC said: “Our activities will be positioned upstream, towards the research and development of new technologies with a view to commercialisation in the future. By leveraging on the wide spectrum of existing research capabilities across A*STAR’s research institutes, from materials engineering and packaging to infocomms, data communications, and high performance computing, the centre is able to accommodate a wide range of R&D activities in areas such as intelligent grids, integration of renewable power generation and vehicle to grid systems, and the development of new generation energy management systems.” Dr Keith Carpenter, Executive Director of A*STAR’s Institute of Chemical and Engineering

Sciences (ICES), where the facility is located, added: “The EPGC is proof of the Singapore government’s serious effort to contribute to the future of smart energy systems. Locating the facility at Jurong Island will not only spur research activities due to the proximity to available sources of energy such as natural gas and hydrogen, it will also complement ongoing research programmes at ICES on energy, including biofuels and solid oxide fuel cells.”

Making Singapore a Living Laboratory By working with partner agencies, namely the Economic Development Board (EDB), Energy Market Authority (EMA), JTC Corporation (JTC) and National Environment Agency (NEA), EPGC is able to participate in this wholeof-government approach to make Singapore a ‘living laboratory’ for companies around the world to develop, test-bed and implement new energy technologies. Professor Low Teck Seng, Deputy Managing Director for Research, A*STAR commented: “EPGC, with its focus on upstream R&D, is an integral part of the entire smart grid value chain. With EPGC, we will be able to attract companies seeking to carry out smart grid RD&D in this region to anchor their activities in Singapore. Being the first experimental research facility in the South-east Asian region, EPGC has a competitive advantage in being able to provide companies wishing to have a foothold in the smart grid sector, either locally or globally, the opportunities to participate in ‘live’ demonstration of power grid-related projects right here in Singapore.”

– Clement Ng 1 According to Global Industry Analysts, April 2010




flydubai secures aircraft financing f lydubai, Dubai’s first low cost airline, has announced aircraft financing worth more than US$750m in deals with GECAS (General Electric Capital Aviation Services) and BBAM.

The financing will take care of the next nine aircraft flydubai is due to receive and secures all the airline’s financing requirements until June 2011. Ghaith Al Ghaith, CEO of flydubai, said: “I am delighted to be able to announce this aircraft financing today. These deals are very significant for flydubai because this committed money secures the next nine aircraft we are due to receive and mean all our financing requirements until June next year are taken care of. “We already have agreements in place with both GECAS and BBAM and it is clear from their willingness to enter into further ties with us that they have been pleased with what flydubai has delivered so far. These are some of the largest aircraft financers in the world and their faith in flydubai is a huge endorsement of us and our success since our launch. “When we went out to the markets this time to seek financing for our aircraft we were overwhelmed by the response. At the end of the day we received offers for far more aircraft than we needed to finance, which is a very nice position for a young and ambitious airline to be in. I believe this is a reflection not only of our position but also of the confidence the financial community around the world has in Dubai.” Both deals are eight year term sale and leaseback agreements.

Passengers disembarking from one of flydubai’s low cost flights The agreement with GECAS is for six aircraft, taking the total number of flydubai aircraft GECAS finances to 10. BBAM are adding another three aircraft to make their total commitment six. Norm C. T. Liu, President and CEO of GECAS, said: “During its first 15 months of operations, flydubai has worked to build a solid foundation for future growth. GECAS is pleased to continue our partnership with this rapidly expanding airline, and provide the financial support they need to continue their impressive growth.” Steve Zissis, President of BBAM, said: “We signed our first financing deal with flydubai at the same time the airline announced its historic aircraft order for more than 50 Boeing 737-800NGs at Farnborough in July 2008. We’re very pleased to

be able to strengthen our relationship with flydubai and look forward to many more years of partnership. Our partnership with flydubai is an excellent example of BBAM’s expansive global footprint and ability to provide solutions for airlines in every stage of development.” flydubai began commercial flights on June 1, 2009. Since then the airline has grown to a fleet of nine B737-800NG aircraft operating to 22 destinations within a five hour flight radius of Dubai. Four more aircraft are due to be received before the end of this calendar year. These will be the new Boeing Sky Interior 737-800NG and will be fitted with the revolutionary new type of inflight entertainment system from Lumexis that the airline announced earlier this year.




Japanese visionary boosted New Zealand’s technology


ill Scollay, a big gruff, friendly trader who can now be viewed as a pioneer of New Zealand’s business globalisation, introduced him to New Zealand in the post war years. Scollays, as the firm was called in those days, was to make a name in electronics via its work with NEC. In the its early days, though, the firm was a commodity trader, especially in scrap, and it was in this role that the firm made its early contact with Japan and with NEC, the company that was very soon to dominate the high-end electronics sector. Dr. Kobayashi devoted his entire working life to NEC. He served as the president of NEC from 1964 until 1976 and then as chairman until 1988, overseeing the company’s expansion from its initial business of telephone equipment into computers and computer chips. Though his background was entirely technical, Dr Kobayashi was an evangelical public speaker on the place of electronics in the world. He spoke in fluent, idiomatic English. Amazingly, for a scientist, he had the ability to relay his message in human terms - quite literally. In Wellington, in the very early 1980s, he was asked if there was any special formula behind Japan’s near-dominance of the world electronics market. “You can start by looking at me,” he exclaimed. “After the war I weighed seven stone. The only direction I could go was up. There were no alternatives. There were millions like me. So that was what we did.” There are elements here of course of Asian, and especially of Japanese, self-effacement

There is also the hard-core truth that a focus on sheer survival does concentrate the human purpose. Today, NEC is the largest supplier of personal computers in Japan and is the second largest semiconductor manufacturer in the world behind Intel Corporation of the United States. Dr. Kobayashi is best known in the global telecommunications and computer industry for coining NEC’s watchword, ‘’C & C,’’ standing for computers and communication, a reference to his belief that the products of the computer and of the telecommunications industries would merge. Curiously, in New Zealand, at this time in the early 1980s, this was by no means the conventional wisdom. Many believed that the information industry would hew to a very sectored structure in which the key entities would proceed in parallel, or even diverge. This view was born out by the failure of several early attempts to blend desktop computing and the telephone. One such failure was International Computers Ltd’s flop with the One Per Desk, which combined a phone with a computer. Early experiments in similar blendings by Datapoint of the US also failed. So Dr Kobayashi’s determination to bet NEC on convergence was at this time viewed as a risk. His convergence clarion call in Wellington came not long after he

Dr Koji Kobayashi of NEC was a decisive figure in the technological development of New Zealand. had originally coined the approach. He had first used the expression at a telecommunications conference in Atlanta in 1977. Now, of course, the computer and communications industries, as well as consumer electronics are all converging in the form of the internet. Dr Kobayashi was a scientist who blended a love of the ultra big picture with a diligent interest in how it was to be carried out. With the Scollay interests he brought about New Zealand’s first telecommunications research and development company, TSSC. This was a joint venture formed in 1982 by Telecom, NEC and Scollay Holdings Limited. TSSC provided local and overseas software development, installation



profile services, and technical support for NEC’s NEAX 61 public digital switching systems that form the backbone of the nation’s public telephone network. The benefit to New Zealand of the TSSC joint venture was that it gave this country a hand in the dominant electronic technology of its time, which was stored programme control telephone exchanges. Until that time exchanges had been mechanical connection junctions. Under stored programme control they became entirely digital and the moving parts were gone. Koji Kobayashi, who died in 1996 aged 89 was born in Yamanashi Prefecture, near Mount Fuji, and earned a degree in electrical engineering in 1929 from Tokyo Imperial University, now known as the University of Tokyo. He later earned a doctorate based on research he did at NEC. After graduation he immediately joined what was then known as Nippon Electric Company and was involved in designing and installing underground coaxial cable transmission systems. One of his first jobs was to install such a system to connect Japan to Manchuria, which Japan occupied in the 1930’s. He played a key role in restoring NEC to health after the company went through a bleak period during World War II and its immediate aftermath. In those days, the story goes, Dr. Kobayashi carried the company’s cash receipts in a bandana and would leave by back exits and travel by back roads to pay

employees before creditors could seize the funds. Displaying an independent streak, Dr. Kobayashi pushed to free NEC as much as possible from the Sumitomo Group, the collection of companies centred around Sumitomo Bank He understood a now widely acknowledged truism about the electronics industry. This is to the effect that if companies were to succeed in it, they had to specialise in it to the exclusion of any diversions. Not so well known, in the West, anyway, was his early identification of another hallmark characteristic of this sector. He was among the first to discover that in electronics and IT innovation, it is the challenge of the new that attracts and keeps star performing personnel. Thus, given the Japanese pay rate subordination to that in the US, he compensated by deliberately arranging NEC’s employment structure so that it presented constant fresh opportunities to those that thrived on them. Until the end of his life, he constantly remonstrated against the notion that financial rewards triggered discovery. In contrast, he insisted, and this was at the peak of the Japan Inc era, it was the opportunity to innovate that was the spur. Similarly, he always modified the West’s conception of the vaunted Japanese employmentfor-life. Nobody was ever forced to stay

at NEC, he insisted. They stayed there because it remained the best place to exercise their talents, and obtain recognition for them. Another example of Kobayashi’s ability to see around corners was to understand how a capital technology-manufacturing supplier such as NEC could lever off the business-tobusiness market and into consumer products. Here again, he pointed out the trail for others to follow He personified too the convergence of the scientist and what we would now describe as the entrepreneur. Prior to World War 11, Japan had pretty much copied US technology. Except for some SCADA developments, Japan was a follower. Not a leader. There was though one exception in which Japan had an early application base, and this was microwave, which was specially suited to the mountainous terrain of the Japan archipelago. It was this lead which NEC was to build upon in the post war years, and which was to provide it with the pre-eminence it enjoys now. Much of the early test-benching of its stored programme control, fully computerised switches was done in New Zealand via the TSSC joint venture personally sanctioned by Dr Kobayashi This development in turn added greatly to the baseload of expertise which was to prove so important when Telecom in New Zealand was itself globalised.




Icona Solutions addresses Chinese automotive industry


ew partners will help Chinese automotive manufacturers increase the perceived quality of their vehicles through the use of Icona’s aesthetica software.

Icona Solutions, Ltd., which develops, supplies and supports the innovative perceived quality simulation and visualisation software solution, aesthetica, has appointed its first two value-added resellers in China. Beijing-based Sili-Tech Co. Ltd. ( and Shanghai-based Shanghai RPT Automotive Engineering Co. Ltd. ( will be responsible for selling and supporting aesthetica in the rapidly growing domestic Chinese automotive design and manufacturing industry. “The Chinese automotive industry is a key growth market for us,” stated Tim Illingworth, chief executive, Icona Solutions. “With 3.5 million cars sold in China in the first three months of 2010 – a 76% increase over the same three months last year – and 42% growth in 2009 over 2008 as a whole, forecasts indicate that sales of cars and light trucks will reach some 25 million annually by 2014, with an estimated total ownership of 130 million vehicles by that time.” “However,” he noted, “the domestic Chinese automotive manufacturers realise that in order for them to succeed in this rapidly growing marketplace, one of their major tasks is to increase the perceived quality of their vehicles. That’s where we see major opportunities for Icona Solutions and aesthetica.” Commenting on their appointment, Jason Li, managing director, Sili-Tech, which is a CAE consulting and systems integration specialist and Siemens PLM Software CAE solutions partner in

One of the Chinese produced small acrs China, with customers in the automotive, aerospace and ship building industries, said, “We are proud that Icona Solutions selected us to be their partner in China and we are excited by the opportunities that exist in the Chinese automotive industry for a unique software solution like aesthetica.” Meanwhile, Fang Ming, general manager, Shanghai RPT Automotive Engineering, which counts Chinese automotive companies including SAIC, JAC, NAVECO, Chengfeng and GW among its customers and is a leading reseller of Dassault Systémes’ full line of CAD/CAM/ CAE and PLM software solutions, said, “Icona Solutions’ aesthetica software is an ideal complement to the mainstream vehicle design and engineering solutions that our customers use on a day-to-day basis, so we see major opportunities in helping them to improve the perceived quality of their vehicles through the use of aesthetica.” “Both Sili-Tech and RPT have the technical expertise and the market knowledge that will enable

aesthetica to make its mark on the Chinese automotive industry”, said Illingworth. “We are looking forward to working with them in taking Icona Solutions to the next level in the worldwide automotive industry.” Icona Solutions’ aesthetica software provides an accurate, visual simulation of the effects of component variation, assembly variation and component deformation in manufactured assemblies to enable full perceived quality reviews using digital models in order to resolve issues of fit and finish quality. The use of aesthetica gives greater insight than has previously been possible into the impact of manufacturing variation on perceived quality by enabling the user to visualise a ‘virtual’ product at different states within its geometric tolerance range, in real-time, and precisely as the customer will see the final, manufactured product. It helps to improve perceived quality while saving time and improving communication in the design process. Icona Solutions Ltd. develops and provides innovative and unique solutions to audit and improve perceived quality in manufactured metal and plastics products. Its software can form an integral part of a product design and manufacturing company’s overall product lifecycle management (PLM) software environment and is supplied and supported globally both directly and through qualified, specialist resellers. Icona Solutions is a member of both Dassault Systèmes’ CAA V5 Adopters and of Siemens PLM Software’s JT Open programs. nextSTEP Visit:






Kiwi manufacturing influx into Thailand


hai airports will soon experience a smoother, more efficient flow of baggage and cargo handling, while greener vehicles will run on the country’s roads in the near future, thanks to two Kiwi companies who have secured partnerships in Thailand. DieselGas, specialising in dual fuel technology, have developed electronic conversion kits that allow vehicles to switch between using diesel and gas, while baggagehandling specialists Glidepath provide design, manufacture and implementation services – useful as Thailand upscales airport infrastructure. Glidepath and DieselGas’s respective partnerships with Thai companies aren’t surprising given Thailand’s heavy concentration on automobile manufacturing for export in the ASEAN (Association of Southeast Asian Nations) market. The manufacture of electronic goods is another huge area. Other New Zealand companies considering Thailand need only look to the country’s projected continual growth for 2010. Foreign Direct Investment here increased to NZ$9.85 billion in the first half, and this is set to accelerate in 2011. From an economic standpoint, Thailand hit a 15-year high with 12 percent growth in the first quarter for 2010, while GDP growth for the second quarter was equally strong at nine percent year-on-year. In fact, Thailand’s first half of 2010 alone saw its best two consecutive quarters of growth since 1995, despite political turmoil. Though disruptive, the roads, ports and most businesses remained unaffected and in September, the Thai finance ministry raised its 2010 forecast for the third time in six months. This presents further opportunities for New Zealand manufacturers. Like most of Asia, Thailand is also looking to reduce greenhouse emissions and is keen to identify low-carbon projects that may be eligible for the Clean Technology

Fund, one of two Climate Investment Funds, which helps developing countries transform their industries to produce less carbon emissions. DieselGas’s entry into the Thai market has been timed well. With the ability to help Thailand become more environmentally friendly and enable vehicle operators to enjoy capital cost pay-back in around six to nine months, they are well placed here. While Thailand presents a host of manufacturing prospects for New Zealand, it is essential to do background work. Companies keen to follow the lead of Glidepath and DieselGas into Thailand must keep several considerations in mind. Firstly, tendering for Government contracts requires a Thai partner and building a close relationship with this partner is key. The Thai private sector is well disposed and often experienced in international joint ventures and partnerships. It is worthwhile visiting regularly when negotiating with Thai counterparts and having someone who is familiar with the business culture. While English is commonly spoken at senior levels, bringing someone who is conversant in Thai will smooth the process and ensure there are no misunderstandings. Thailand has huge automotive, plastics and electronics manufacturing industries, and it is important to remember that Thailand has been working with foreign manufacturers for many years. Japan is the largest foreign investor in Thailand, primarily in the manufacturing sector. Despite this, do not assume that Thailand will be familiar with the materials,

By Karlene Davis, New Zealand Trade and Enterprise compounds and short-run processes used in New Zealand. It is important to research the local knowledge of the materials used and be prepared to educate the market, especially if your product or service is more costly than inmarket competitors. The Global Competitiveness Report 2010-2011 released by the World Economic Forum ranks Thailand 60th out of 139 countries evaluated for production process sophistication and 64th for availability of the latest technologies. It rates 12th globally for strength of investor protection, even ahead of economies such as Japan, India, Indonesia, Australia, Italy and Sweden. Most importantly, it is crucial to establish how your product or service fits into Thailand’s overall scheme of things – whether or not it will satisfy certain needs or capitalise on a trend in market be it changing the face of cargo to greening the future. Karlene Davis is New Zealand Trade and Enterprise’s Trade Commissioner for Thailand, Cambodia, Laos and Myanmar and is based in Bangkok, Thailand. nextSTEP Visit:



buiness news

Cross-selling provides a growth opportunity for retail banks in Singapore D

espite the average Singaporean holding many financial products, only a few of these are with their main financial institution (MFI).

accesses to product or service discounts on specific retail outlets.

According to a report by the independent business analyst Datamonitor, this provides a great growth opportunity for retail banks to derive revenue from customers through product bundling offers and incentives that will create a win-win situation for financial service providers and consumers.

“Credit card exclusive discounts offers have been proven as an effective acquisition method with the side effect that many Singaporeans now have more cards in their wallet than before. As a result, the main financial institutions of these customers are missing out on the potential to increase revenue per customer” says Harry based in Sydney.

“An average Singaporean holds a huge number of financial products, especially on credit cards. Indeed, 80% of customers

have at least one credit card and 42% of them hold three or more” comments Harry Senlitonga, senior analyst at Datamonitor. Consumer demands and many attractive offers from card providers, such as credit card exclusive discount offers have caused diverse credit card product holding in Singapore. As its name suggests, exclusive discount offers provide cardholders with exclusive

Future planning for High Net Worth in Hong Kong F

inancial planning will be among the products and services that High Net Worth (HNWs) in Hong Kong will most demand, according to research from independent business analyst Datamonitor. The research reveals that over 50% of HNWs in Hong Kong will look for financial planning in the next two years. “High demands for financial planning could be attributed to the large proportion of 31-50 years old HNWs in Hong Kong who have long-term investment objective,” says Harry Senlitonga, senior analyst at Datamonitor.

“Equities and real estate investments are expected to increase in popularity, along with the expectation for investors to return to consider riskier investment options by leaving conservative investment options such as fixed income and cash or near-cash products,” adds Senlitonga, based in Sydney.

However the biggest shift in asset allocation will be seen in the withdrawal of funds from fixed income. Indeed, more HNWs will leave fixed investments and cash or near-cash products by shifting to equities and real estate investments due to an expected higher level of risk tolerance.

Given the age profile of HNWs in Hong Kong wealth managers should focus more on providing a wider range of services to cater for different investment needs as in two years from now, more than half of HNWs will have a higher appetite for risk than they do today.

Financial institutions should therefore revisit their approach to consumers. Indeed, Datamonitor believes that product bundling offers, which have been successful in many other countries, will help strengthen MFI relationships with customers. “A low product holding within the MFI shows cross-selling still offers plenty of growth opportunities for Singaporean financial providers. Incentive schemes aiming to encourage multiple product uptakes within the same institution may create a win-win scenario for both financial service providers and consumers” concludes Harry.





Net Neutrality: What


earch Engine Google and Verizon, a leading internet service provider and formerly one of the AT&T Bell companies, are close to finalising a deal which would facilitate Verizon’s being able to speed online content to internet users more quickly, if the content’s creators are willing to pay for it. The idea that some sites, through paying a fee (or other) to Verizon, can gain priority and run faster than others has backers.

It also has its share of critics and protestors, all of who perceive such an arrangement as going against the ethic of Net Neutrality. Andreas Pouros, Chief Operating Officer at Greenlight, a UK-based independent search and social marketing agency, examines the extent to which it can be claimed that what currently exists is truly in keeping with the ethos of neutrality. According to Pouros, Google has two challenges, one of which is legislative, the other reputational and the search industry is watching. Net neutrality, or Internet/network neutrality is the principle that people simply shouldn’t mess with the magic of the internet and should take a hands-off approach with its administration; more specifically that governments and internet service providers (ISPs) should not place any restrictions on the internet’s content or means of accessing that content – two users should essentially have access to the same content in the same way. According to Google, “network neutrality is the principle that internet users should be in control of what content they view and what applications they use on the internet. The internet has operated according to this neutrality principle since its earliest days... Fundamentally, net neutrality is about equal access to the Internet. The broadband carriers should not be permitted to use their market power to discriminate against competing applications or content. Just as telephone companies are not permitted to tell consumers who they can call or what they can say, broadband carriers should not be allowed to use their market power to control activity online.” (Guide to Net Neutrality for Google Users)

However, Google and Verizon have put forward a proposal to the Federal Communications Commission (FCC), to essentially retain this net neutrality on the public internet but to allow broadband operators and network operators to offer new services that might be discriminate in terms of their price and speed. They are proposing that broadband providers can allocate bandwidth for such discriminatory projects, working with other application or service providers as they see fit. They mention a few specific examples to help illustrate their thinking, examples like health care monitoring, advanced educational services, or new entertainment and gaming options. Essentially, they are proposing they be permitted to create a two-tier system whereby network capacity could be sold to companies willing to pay for that service to in turn provide a higher quality service to their opt-in users. Whilst Verizon has said it has no intention of selling bandwidth from the ‘public’ network, it wants to make certain it could provide dedicated bandwidth-based services to third parties if it wanted to. Verizon CEO, Ivan Seidenberg said: “Verizon is standing tall. We said we agree that there should be no paid prioritization of traffic over the public Internet. Google (and others) will continue to innovate, and we have to feed that cookie monster. All we have asked is that we are allowed to offer services like Fios.” Fios is a bundled home communications service Verizon offers that makes use of an end-toend fibre optics network, offering internet, telephone and television. Verizon cannot offer it over the

Internet, given neutrality requirements, so it is offered as a network separate from the internet. The proponents of net neutrality clearly don’t like this one little bit, as creating a two-tier system, even if it means legislating neutrality in one of the tiers, results in the fragmentation that they fear and still discriminates in their eyes. Given that Google’s unofficial motto is ‘Do no evil’, the backlash in some quarters has been brutal. On the ominous Friday the 13August, internet users from across the Bay Area converged outside Google’s offices in protest. The rally was organized by, Credo Action,, Free Press and the Progressive Change Campaign Committee. summarised the sentiment as follows: “Google previously had been a champion of policies such as Net Neutrality — the fundamental principle that keeps the Internet open and free from discrimination. Its decision to team up with Verizon, long an opponent of such policies, has drawn the ire of public interest advocates.” So who are pro / against net neutrality legislation? Many Internet giants are proponents of net neutrality, and also supporters of the US government’s involvement in regulating it to ensure the internet stays ‘open’. The likes of Amazon, Craigslist, Google (kind of), Facebook, Sony, IAC, and Twitter fall into this camp. President Obama himself does too: “I am a strong supporter of net neutrality… What you’ve been




’s all the fuss about? seeing is some lobbying that says that the servers and the various portals through which you’re getting information over the internet should be able to be gatekeepers and to charge different rates to different Web sites… And that I think destroys one of the best things about the Internet—which is that there is this incredible equality there… Facebook, MySpace, Google might not have been started if you had not had a level playing field for whoever’s got the best idea and I want to maintain that basic principal in how the internet functions. As president I am going to make sure that that is the principle that my FCC commissioners are applying as we move forward.” In the against net neutrality camp are a number of large hardware and telecommunications firms, who would invariably benefit from being allowed to redefine the way the Internet works as they control the means of accessing it. In addition, opponents also include heavyweights such as Bob Kahn (inventor of TCP – “net neutrality is a slogan that would freeze innovation in the core of the Internet”*) and David Farber (Professor - “The Internet needs a makeover”**). Robert Pepper, senior managing director of global advanced technology policy believes all the pro-net neutrality hype, is just that, hype. What does the Law say? The law that affects net neutrality differs globally. In the US there is considerable debate around the topic, with the FCC being involved in trying to legislate around this area, and sometimes not by choice. For instance, a court case against Comcast was the first to seriously touch on this aspect, with Comcast was accused of unlawfully throttling BitTorrent traffic in a class action suit. Comcast settled for $16m, with the FCC stating

Comcast needed to comply with transparent network management practises. In Europe, there has been a fairly complex process underway to decide whether to legislate in this area and to what degree. In 2006 there were mixed conclusions from a number debates. One, sponsored by AT&T, concluded net neutrality legislation would be unattractive. Other debates at the Royal Society and Institute of Public Policy Research, in the same year, reached conclusions that were in favour of it. In 2009, as part of the Telecoms Package (to be implemented in May 2011 by all EU member states), service providers were to be held to a higher standard of transparency, making it compulsory for service providers to inform customers whether the service they are subscribing to includes any traffic management techniques and what the impact of those would be on service quality or any other restrictions. AT&T put forward 5 revisions to this, of which it successfully achieved 2 of them. The two revisions essentially leave the door open for discrimination against websites and users. Are we truly net neutral today and if so, how long can it be sustained? There are a number of central arguments used in opposition to any kind of net neutrality legislation. Firstly, that the ability to charge users/sites different rates for differing levels of access will provide the revenues to ISPs and other network operators necessary for them to recoup their investments in broadband networks. Verizon has said there is no current incentive for it to develop and deploy advanced, super-fast fibre optic networks if it can’t charge more for access to

such networks. Verizon and a number of ISPs have often referred to firms like Google and Skype as ‘freeloaders’ for making money using networks that they have provided at a cost of billions. Secondly, many suggest what we have right now isn’t in fact net neutrality at all. The biggest firms can invest in higher bandwidth deals and server replication to provide faster access for its users in comparison to smaller sites that wouldn’t be able to afford such infrastructure, for net neutrality isn’t even something that exists to uphold. Thirdly, the increase in rich media means infrastructure providers have far more pressures on their resources than was once the case. Bret Swanson of the Wall Street Journal suggests Youtube streams as much data in 3 months than the world’s radio, cable and broadband television channels stream in one year, i.e. 75 petabytes. By extension he believes telecommunications firms are simply not ready for the era of ‘exabyte’ delivery and something needs to give. What next? The ball is in the FCC’s court. Given the FFC is facing powerful and influential pressure on both sides, it won’t be able to please everyone. The next few weeks will be very interesting as we see the debate unfold in the commercial, political, and invariably in the press world. Of further interest to us search people is what impact it may have on Google generally. Wired called Google a “net neutrality surrender monkey” this month, which means it has two challenges, one of which is legislative and the other reputational. nextSTEP Visit:http://




Tribrid Modelling produces “Waffle” phone first at LG


orean manufacturing giant LG Electronics has recently introduced its first mobile phone designed with Delcam’s Tribrid Modelling software. The Waffle phone features a surface texture created in the ArtCAM artistic CADCAM program, wrapped around the body of a phone design produced with the PowerSHAPE CAD software. It is expected to be the first of a number of new models that will use the Delcam software to create the distinctive designs needed to build market share in the highly competitive and fashionconscious mobile phone market. Tribrid Modelling is Delcam’s unique, patented approach to design that adds triangle modelling to the solid and surface modelling options that are available in hybrid modelling systems. It gives the ability to add triangle files of logos, branding, textures or other 3D decorations onto the surfaces of CAD models. This effect is rather like sliding a transfer over the surface of an object, with the added advantages that the decoration can be scaled or stretched to fit any given area, and that the result is fully three-dimensional.

innovation in consumer electronics, mobile communications and home appliances. The company, which is based in the Korean capital Seoul, employs more than 80,000 people, working in over 115 operations around the world. Last year, its global sales topped US$ 43 billion. Staff from Delcam’s Korean joint venture, Hankook Delcam, had their first contact with LG in August of last year. An initial presentation on the potential for Tribrid Modelling was followed by a longer meeting with a large group of designers from the

company. Subsequently, Hankook Delcam produced a series of rapid prototype models to further demonstrate how the unique Delcam technology could produce sophisticated designs quickly and easily. The presentations were so impressive that LG decided to purchase the Delcam software in the following month. This was both pleasing and surprising for Hankook Delcam as most potential customers in Korea insist on a comprehensive evaluation period before making any purchasing decisions. Apart from the design capabilities of the Delcam software, the staff at LG were impressed with the full range of Delcam programs that could cover the whole design and manufacturing process for the phone cases. In particular, they were pleased to see how quickly the software could generate machining data for tooling once the product designs were completed.

Tribrid Modelling also allows Boolean operations to be carried out between triangle models and either surfaces or solids. For many years, PowerSHAPE was one of very few CAD systems able to perform Boolean operations between solids and surfaces. The ability to perform similar addition, subtraction and merge operations with triangles as well makes the software even more flexible. LG Electronics has become a global leader through more that 50 years of technical

The LG Waffle phone is the first from the company to be designed with Delcam software.

Of course, the comprehensive training and support available from Hankook Delcam were also an important part of the decision. The value of these services was seen in the speed with which LG was able to introduce its first design with the new software. Following this initial success, Hankook Delcam is now approaching other parts of the LG organisation to investigate further opportunities to introduce its software. nextSTEP Visit:




Production capacity for largescale machines expanded


ngel capacities for the production of duo two platen injection moulding machines with between 350 and 5500 tonnes clamping force are to be further augmented. Following the 6,000 qm extension to the St Valentin plant to a total of 68,000 qm in June 2009, production capacities in Shanghai are now being expanded. The fast revival of the Chinese market after the economic crisis and rapid growth of the Asian large-scale machine market relevant to Engel and the growing market share of Engel large-scale machines have this year resulted in an extremely high utilisation rate of the Chinese facility.

meanwhile close to capacity limits,” says Dr. Peter Neumann, CEO of Engel Holding. “Our goal is to manufacture two hundred large-scale machines annually in Shanghai. The rapidly growing demand for our Engel duo machines is encouraging because we are competing daily with Asian manufacturers and in the past few months were able to win over a large number of new customers with our Engel duo machines ‘Made in China’.”

Currently two large-scale machines are being manufactured weekly in Shanghai for delivery to Asian customers. By summer 2011 the plant capacity in Shanghai is to be increased to 200 machines. This expansion is driven by the need to satisfy in particular the growing demand for Engel duo large-scale machines in South-East Asia and India.

“Specifically, we are now planning to expand the Shanghai plant by 9,000 qm to a total of 17,500 qm. This will double our production area. Besides doubling the floor space, our plans include the optimisation of existing processes.”

“Production in Shanghai is

A duo two platen injection moulding machine For example, a separate dispatch area will be built to guarantee efficient packaging and shipping of the large-scale machines. This will boost the efficiency of the final assembly stations. nextSTEP Visit;

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business news

Online Banking Channel more popular in Asia-Pacific


lobally, access to the online channel has grown at a rapid pace, presenting huge opportunities for Financial Services providers to access the global community. Data from the International Telecommunications Union (ITU) show that 45% of the world’s internet users are currently from Asia or Africa compared to 40% in North America and Europe combined. However Datamonitor’s Financial Services (FS) Consumer Insight survey reveals very different consumer appetites for FS products within these regions.

In terms of day-to-day management of current accounts, consumers in the Asia-Pacific region have keenly adopted these online technologies. Registration levels for online current accounts are higher in Asia-Pacific overall than in France, Spain or Italy. The situation in India is even starker – whilst having one of the lowest levels of internet penetration as a country, over a third (37%) of those with a current account are registered online for it.

AP. When asked why they don’t bank online, 75% and 61% in China and Japan respectively sited security concerns as a factor (59% of Asia-Pacific consumers overall), in comparison to 39% of Eurozone and US consumers.

One the whole, Asia-Pacific consumers are far more engaged with the online banking channel than those in the rest of the world. They also perform a broader range of tasks, and are more inclined to seek a somewhat closer relationship with their bank through the online platform - 26% of Asia-Pacific consumers have used the online channel to set up email or SMS alerts in the last six months, compared to only 10% in the Eurozone and US, for example.

Asia Pacific also holds a higher rate of online saving activity than any other region in the world, taking the top three spots in Datamonitor’s recent Financial Services Consumer Insight survey. Japan shows the highest level of online savings activity with rate of 72%, followed by China at 65% and Australia at 57%. Singapore follows closely in fifth place on 50%. These rates are significantly higher than many other Western regions, including the US at 45%, Germany at 39% and Italy at 13%.

Mobile banking is expected to take the same upwards trajectory as online banking and is expected to grow faster, and has become especially popular in some AsiaPacific countries in providing basic current account tasks for both the unbanked (e.g. in India) and more remote consumers who may not be internet users. Security of online banking is a concern for consumers in AsiaPacific However, there remains a significant proportion of internet users not registered for their current account online. Security concerns are the main deterrent to consumers’ use of the online channel – and such concerns appear to be far higher in

Savings products a key growth opportunity in Asia-Pacific The popularity of the online channel in Asia-Pacific is not restricted to day-to-day banking activities.

This shows that there is still a lot of room for growth through growing internet access in regions such as China, or by focusing on reaching those not yet saving online in Australia and Singapore. Online savers tend to be affluent and prepared to make their own financial decisions, making them a highly profitable market for financial service providers to target. Online borrowing levels restricted by cultural forces Online borrowing products provide an interesting and surprising opportunity for lenders in the region. Overall, despite an unwillingness to borrow amongst

some consumers in the region online appetites are high. Overall consumers in Japan are the most conservative in the world when it comes to borrowing: 5% currently have a loan, compared to 28% on average worldwide and 23% across Asia Pacific as a whole. In complete contrast, 34% of Chinese online consumers are borrowing at present. Australia and Singapore both lie within these extremes, on 19% and 24% respectively. Despite this, attitudes towards online uptake in this area of personal finance yield surprising results. Japanese consumers are highly averse to borrowing, but when they decide to borrow, they are very happy to apply online. Consumers in Australia, too, are relatively willing to take out loans online should they feel the need to borrow. However in Singapore, a very low proportion of borrowers have proved willing to exploit the online channel, instead preferring to use more traditional channel methods that involve at least some degree of personal contact. The future lies in personalising the online experience The rise in Web 2.0 technology and interactive communication has allowed banks to provide a far more effective 2-way interface for consumers. In doing so, banks have succeeded in shifting preferences and quelling some consumers’ concerns. Use of social media in the FS industry is fast gaining pace particularly in Asia-Pacific, and banks such as UBank in Australia have pioneered its use as a key customer retention tool, customer service and feedback platform.



business news

China attractive at present I

n a comprehensive review of the wealth management markets across the leading Asia-Pacific countries China is rated as having the most attractive market for international players at the present time.

why so many of the international private banks have chosen to give it a wide berth

China is the smart choice for international private banks, due to its burgeoning wealth levels and low service levels. While the macro business environment in China is still difficult for foreign players, there is a vast and ever expanding pot of wealth in the country which currently is not particularly well serviced.

Perhaps controversially, India places third in the rankings. It is let down by key macro and institutional variables and by the fact that its pool of wealth is still relatively small and concentrated compared to other countries in APAC.

The market challenges in China should not, however, be underestimated, with real issues around market entry, availability of talented personnel and the attraction of HNWs in the country. The attractiveness of the wealth management markets in Australia, Hong Kong, Singapore, India and China were evaluated using the proprietary Wealth Management Opportunity Index. This market-

leading index scores the overall attractiveness of country markets as well as their customer and competitor features, all from the point of view of international private banks. Australia is rated as being the second most attractive market for international players because it offers many of the comforts of home to Western players: a well developed economy, an attractive business environment and significant numbers of sophisticated high net worth individuals (HNWs). However, for all of its obvious appeal, high levels of competition and certain HNW characteristics make Australia’s wealth management market a dangerous one for international players, explaining

On the plus side, India has a number of wealth management market features which are very attractive to international players: it does not have prohibitive regulatory obstacles, the market is fragmented, the investment infrastructure is well established and the nature of HNWs is favorable to international private banks. Indeed, the significant levels of activity by international players in the market and their evident success testify to its merits the report concluded.

Singapore most tax-friendly for entrepreneurs A

comparison of the taxes burden faced by start-ups in six economies reveals significant variation with Singapore coming out as the most tax-friendly jurisdiction. released most rational choice — the report a report that compares the tax concludes. policies of six countries: UK, To illustrate its findings, the report USA, India, Australia, Russia, and considers the case of a hypothetical Singapore. Using the tax rates for start-up firm that expects to make the year 2009, the report performs an annual income of US$300k. a comparative analysis of the tax Such a firm will have a total tax bill impact on a new firm of only US$34k in Singapore while incorporated in each of these it would face an approximate tax countries. bill of US$60k in Russia, US$63k in Among the six countries considUK, US$90k in Australia, US$100k ered, the report finds that the tax in US, and US$102k in India. burden imposed on new firms is The authors of the study caution the smallest in Singapore while it that each country’s tax policies is the highest in India. If differ from those of the others in maximisation of take-home profits the exemptions, incentives, and were the main objective, for an depreciation allowances that they entrepreneur who has the permit. The major exemptions flexibility to incorporate his or her available to companies have been business in any of these considered in this analysis but their jurisdictions, Singapore offers the

esoteric nuances have been ignored. Jacqueline Low, the Director of Corporate Services at Janus Corporate Solutions — a leading Singapore corporate services firm that runs the site — further emphasised the long-term attractiveness of the Singapore tax policies by adding, “The historical trend of corporate tax rates in Singapore over the last 5 years shows consistent reduction. Per government’s stated policies, this trend is likely to continue in Singapore whereas in most other countries this trend is pointing upwards due to the rising budget deficits that these governments face.” nextSTEP Visit:




Are your products get


espite the best efforts of an international naval police force patrolling the Gulf of Aden and nearby seas, gangs of ruthless criminals can still capture highly valuable cargo ships and hold them to ransom.

Most vessels hijacked by the modern pirates in the busy shipping lanes off the coast of Somalia have to be “reclaimed” by their owners for an average of two million US dollars each.

company in the UK has developed a new product that it believes can halt or hamper today’s pirates who use small fast boats to board the large vulnerable and slow-moving vessels.

In an attempt to prevent that, an imaginative private security

The novel defence system consists of a simple but strong net that can be draped over the stern or sides of a possible target vessel creating a safety zone - and floated clearly on the surface for some distance to prevent the pirates getting their speed-boats close to the big ships they seek to capture.

Below: Hooking the pirates: in attempts to prevent hijackers capturing valuable cargo ships on the high seas, a security company has developed a trailing net system that it believes can stop or hamper today’s pirates who use fast boats to board vulnerable slow-moving ships such as tankers. Image by Anti-Piracy Maritime Security Services

In the years of anarchy that Somalia has suffered since its government was overthrown in

1991, thousands of pirates now operate off its coast. Somalia’s 3,000-kilometre coastline - the longest in Africa - has become one of the world’s most dangerous waterways. No ship is safe. Pirates have hijacked aid shipments, kidnapped crews, and have even fired rocket-propelled grenades at cruise ships. The idea for the naval safety net came to Nick Davies, founder of the Anti-Piracy Maritime Security Solutions company - based in Poole, south-west England - after he noted the way in which powerboat propellers can be badly fouled by fishing nets. He said: “In essence it [the antipirate system] is a fishing net that is deployed, then it floats on the water all around the ship and snags the propellers of any boats coming near it.” Sounds basic but




tting to their market? effective? – “Yes, some times the easiest things are the things that do work.” Davies believes the counter-piracy device will turn the tables on the high-seas criminals because any ship with the trailing nets is not going to be a target they would want to get close to for fear of ending up with a disabled boat. The nets can be fitted to any vessel from the bow to a line level with the stern gear down the sides with six-metre steel booms holding the net away from the vessel. The stern net attaches across the full width of the stern and trails for 50 metres behind the vessel. When not in use they can be safely stored on deck in their own containers. They can be deployed and recovered in fewer than 20 minutes. All the nets are fitted with orange warning buoys to act as a visual deterrent and to warn of danger.

Anti Piracy Maritime Security Solutions (APMSS) of Poole, Dorset, England, is a UK company established in 2008. Its director is Nick Davies, a former army pilot. The company says its goal is to provide for the safety and security of merchant ships as they make passage through the Maritime Security Patrol Area in the Gulf of Aden. The APMSS team members have prior experience in a variety of fields, including UK Special Forces (Special Boat Service, antiterrorist units), navy, army and police. Its interim deck-watch team provides non-lethal ship security through known high-risk piracy areas, using necessary equipment, including long-range acoustic device. APMSS provides early warning of a potential pirate attack. More than 90 ships were attacked off the coast of Somalia in 2008 and many vessels - and crews -

By Richard Maino still remain in the hands of Somali pirates who are prepared to wait for months or longer while negotiating their ransom demands. Tankers are an obvious target of opportunity, with an average cargo of 110 million dollars’ worth of crude oil. They are run with a small crew and a fully laden tanker is relatively easy to get on board from smaller fast boats, often sent out from a mother ship patrolling the seas to find victims. Experts estimate that the pirates and the warlords who run them have “earned” some 30 million dollars in ransom money in 2008. Currently, the Nato alliance, the US Navy’s Fifth Fleet, and a host of other countries have ships patrolling the coast of Somalia and the Gulf of Aden - an area of about 2.84 million square kilometres (about 1.1 million sq miles) - to prevent piracy.

Appetite for risk increases for wealthy individuals in Singapore SINGAPORE High net worth (HNWs) in Singapore are anticipated to have a somewhat higher appetite for risk in two years compared to today, according the latest research from independent market analyst Datamonitor. The research reveals that within two years in Singapore, fixed income will see the biggest reallocation among HNWs’ portfolios. Indeed, more HNWs in Singapore will leave fixed investments and cash/near-cash products, shifting to equities and alternative investments due to a higher level of risk tolerance. The change of investors’ conservative mindsets due to the recent global economic crisis is one of the factors causing this shift in asset allocation among HNWs’ portfolios. HNWs in Singapore will focus more on equities and alternative investments, and

move away from cash and near-cash products and fixed income. However, one of the main challenges for many wealth managers in Singapore is to convince HNWs to invest in riskier products. Without a doubt, the recent global crisis has made HNWs more cautious in making investment decisions. The research also explains that an evidence of due diligence on the part of clients into recommended products is among the most successful means of getting HNWs in Singapore back into riskier products. In the next two years, wealth managers will have to address this issue in anticipation of HNWs demands in moving to riskier products. Wealth managers need to provide not just some assurances through evidence of due diligence, but also evidence of returns from higher risk products.




TRADE SHOWS February 2011 Australasian Oil and Gas Exhibition,23-25 February Perth Convention Exhibition Centre, Perth, Australia

March 2011 Asia Pacific Sourcing 9-11 March, Koelnmesse Cologne Central Districts Field Days 11-19 March, Manfeild Park, Feilding, Wanganui interzum guangzhou 2011 27-30 March, China Import and Export Fair Pazhou Complex, Guangzhou Macao Int’l Environmental Co-operation Forum & Exhibition 2011, 31 March, The Venetian Macao-Resort-Hotel

April 2011 Macao Int’l Environmental Co-operation Forum & Exhibition 2011, 1-2 April,The Venetian®Macao-Resort-Hotel 5th Metals Industry Conference, 14th-15th April 2011, Wellington

May 2011 SouthMach 11-12 May CBS Canterbury Arena, Christchurch (Asia Manufacturing News will be previewing SouthMach in April issue) Australian International Engineering Exhibition (AIEE) 24-27 May, Melbourne Convention and Exhibition Centre. CHINAPLAS 2011 – The 25th International Exhibition on Plastics and Rubber Industries 17-20 May, China Import & Export Fair Pazhou Complex (Area A & Area B), Guangzhou, PR China

June 2011 BuildNZ 26-28 June ASB Showgrounds, Auckland Designex-Auckland 26-28 June, ASB Showgrounds, Auckland. July 2011

July 2011 Speedshow 23-24 July, ASB Showgrounds, Auckland

September 2011 Rugby World Cup, New Zealand




Penang Port’s main line vision shared by Konecranes group


s the port of Penang undertakes the biggest expansion in its history it is employing worlds best practices to ensure the reliability and efficiency of the craneage system on which its cargo handling depends. PenangPort has ongoing maintenance arrangements with the global Konecranes Group to service its ship-to-shore cranes as it invests RM 1.10 billion ($US340 million) from 2007-2012 to expand elevate its status to a main line port capable of handling more than a million TEUs (Twenty foot Equivalent Units) a year. The nine existing ship-to-shore cranes – with three electric overhead travelling (EOT) maintenance cranes for which Konecranes is also responsible at North Butterworth Container Terminal – are integral to the port’s performance as it aims to ultimately achieve crane productivity of 30 TEUs an hour. Another seven ship-to-shore cranes are scheduled for delivery by the end of this year, with service and parts supply also provided by Konecranes through its nearby Singapore headquarters and worldwide network of 485 locations in 43 countries with more than 366,000 cranes of all brands under service contracts. The current NBCT expansion Phase 3 consists of Segment A1 and A2. Segment A1 involved the extension of a new 600 metre berth at the Northern end of the existing 900 metre wharf. Segment A2 involved the construction of a 771 metre length of stacking area for export containers behind the wharf. The stacking area is capable of handling 465,000 TEUs with 2640 ground slots. The total investment of this project inclusive of the handling equipment is about RM900 million. “We are a 24/7,365 days a year

The ship-to-shore cranes operatinmg at PenangPort operation, so prompt and reliable service of cranes of all brands is very important to us,” says PenangPort Senior Maintenance Engineer, Engineering Services – SBU Container Services, Muhammad Asri Bin Md Isa. “It is definitely very important that we have no interruptions, and reliability will be increasingly important also as we expand our current fleet of STS cranes over the coming year. “This is one of the reasons why we appreciate the global expertise of the Konecranes organisation, which can source parts promptly and advise on a wide variety of technical issues that it is familiar with worldwide. And we appreciate too the expertise of the local Konecranes people who understand our operations,” said Mr Asri, who is assisted by Konecranes Sales Engineer, Maintenance Services, Malaysia, Puah Boon Kheng. Mr Boon Kheng, whose office in Penang is backed by the resources of the regional Konecranes headquarters in Singapore, is responsible for the maintenance agreement covering the 10-ton

Konecranes XL EOT crane, and the 8-ton CXT and 3-ton XL cranes in the maintenance facility. He also provides assistance for the ship-to-shore cranes, working with the port’s own maintenance teams, and for the mobile RTG cranes that move containers around the port’s yards. Konecranes is involved in repairing and upgrading the gantry cranes, as well as the quay cranes serving customers globally as well as those in Malaysia, Thailand and Indonesia. Recent jobs in which they have been involved include a trolley rail and wheels replacement on STS Crane No 4, completed within three weeks, and rebuilding of the bogie on an RTG crane to repair the expected wear and cracking resulting from heavy service in the container yard. Mr Boon Kheng says such jobs illustrate the time-saving ongoing partnership with PenangPorts’ own staff, who draw on Konecranes services to enhance reliability, safety and efficiency by obtaining parts and service promptly and at competitive pricing. Mr Asri says PenangPort can get parts promptly from Konecranes local Penang office, or in a week or two from Singapore – “Whenever we need some assistance, Konecranes is ready to assist. The price is reasonable – they come to us with a package – and, being an international company, it is very helpful in sourcing spare parts. “Dealing with an OEM and world recognised crane service organisation is very helpful, particularly when dealing with the Department of Safety, for example. Our relationship makes it easier to attain regular safety certification, Continues page 31




Power lifting partnership provides energy generators


s one of the powerhouses of Asia-Pacific economic growth, Thailand invests heavily in electricity generating capacity to service its burgeoning major industries, including automotive and electrical manufacturing and tourism. The country, which has the second largest economy in SouthEast Asia after Indonesia, plans to increase total generating capacity from about 30,000 MW in 2009 to more than 50,000MW by 2021. * (Electricity Generating Authority of Thailand, EGAT) Of this total, well over a third will continue to be provided by Independent Power Producers (IPPs), private investment vehicles that work with the Electricity Generating Authority of Thailand, EGAT, to provide the infrastructure capital needed to build new infrastructure and ensure that existing assets are operated at peak efficiency and optimum safety.

As the first generating station in Asia to achieve IS09002 quality certification – and as a winner this year of its seventh consecutive EIA environmental monitoring awards – Khanom has set out to be a model of safety and efficiency. It has adopted ISO 14001 and TIS 18001 OHSAS 18001: 1999 in its operating standards. KEGCO has also been awarded National Safety Awards for eight consecutive years. “We are now introducing Total Quality Management systems in a programme extending over the coming three years,” says Khanom Electricity Generating Company Electrical Maintenance Section Manager, Suebsak Choorit.

The global Konecranes group has become a long-term partner in this process with the Southern Thai KEGCO subsidiary of The Electricity Generating Public Company, EGCO, which is the first independent power producer in Thailand . This public company that owns and develops generation units which cover diversified fuels such as natural gas, coal, diesel oil, hydropower and biomass, in accordance with the government’s policy on fuel diversification to ensure energy sustainability.

“As part of our drive to achieve global standards of excellence in everything we do, we actively seek to focus people to improve everything we do. We want to have a continuous process of reviewing how we did things before, and seeing what can be developed to improve the process,” said Mr Choorit, who works with Konecranes Thailand Branch Supervisor Sommart Chockseareesuwan to ensure world-best practices are adopted for the company’s lifting equipment.

One of EGCO’s earliest acquisitions, through KEGCO, is the 824 MW Khanom power plant, a major base load generator in the Nakhon Sri Thammarat province in Southern Thailand, where it operates a combined gas cycle turbine (674MW) and two barge-mounted thermal plants (150 MW).

Konecranes has been involved for more than 10 years in achieving outstanding reliability levels from the 39 cranes at Khanom. This year Konecranes Thailand Branch, under the direction of Service Branch Manager Jirapong Kocharack, signed another threeyear preventive maintenance contract for the vital equipment,

ranging in size from overhead cranes up to 65 tons, down to rotary and jib cranes, HRSG cranes (heat recovery steam generator), gantry cranes, workshop cranes, electric overhead cranes and chain hoists and chain blocks. When involved in an ongoing basis in assisting with safety training and preventive maintenance, Konecranes uses the customer knowledge and expertise of its Thai team to deliver locally the global resources of the Konecranes group. The group employs nearly 9,700 people at more than 485 locations in 43 countries and has more than 366,000 cranes of all brands under service contracts. “This type of support is vital, because we depend on the cranes for everything from routine maintenance to the removal of the rotors and turbines of our four gas turbines and three steam turbines. We take out turbines every four years in a rolling programme, so it this process is going on much of the time and obviously we need complete safety and reliability to achieve maximum efficiency,” said Mr Suebsak. “This is specialised work and you have to know your suppliers very well. I am very confident with Sommart that if I call him in an emergency he will be on-site very quickly and know immediately where to go to find and fix things. “Even with routine work, a global company such as Konecranes can source parts and technology more quickly than the old ways. We have many brands of Japanese and European cranes on-site, in addition to our Konecranes equipment for heavy lifting. They know what parts we need to have on-site, what’s likely to be needed.



news “If a crane ever did break down, they would fix it quickly, because they know where to look, where to get parts and how to get back into production quickly. “If change your service people often, you have to start all over again with them, which is not the case with Konecranes. “And the safety and efficiency benefits are not only in our routine contract – we can rely on Konecranes expertise nationally and internationally when they do load testing and safety testing of the cranes.” All inspections are based on Konecranes ServMan crane inspection and service computer programme, with local rules integrated (for the Kor Por 1 Inspection). The inspection in performed by qualified and certified inspectors with an inspection report is given to the customer within a week of the inspection, including: • The working condition of the cranes. • The safety condition of the cranes. • Any actions needed to improve the cranes’ safety. • Any actions needed to improve operator and production hazards. • Safety Certificate (Kor Por 1) signed by a 2nd Degree Thai Mechanical Engineer. The inspections are performed four times a year, or once every three months, as required by the Interior Ministry of Thailand for overhead crane inspections involving the Safety Certificate (Kor Por 1). Konecranes also upgrades existing equipment to new efficiency levels, including Khanom’s largest, 65-ton, double girder Konecrane, which is used in the turbine refurbishment programme. This was brought up to Konecranes CXT standard, with twin motors and twin motor brakes for

A 65 tonne overhead crane enhanced safety and operating durability when dealing with very heavy equipment. CXT Features include – ☛ High performance hoisting motors with 60 per cent ED rating, which combine extra power with superior cooling characteristics. The hoisting motors also have the power and flexibility for temporary peak usage situations. Motors feature overload liming devices, disk brakes, and thermal protection. ☛ Inverter control as standard in crane and trolley travels, for easy and effective load control. Smooth starts and stops reduce wear and mechanical stress on structures and minimises the load sway. Improved productivity is achieved because moving and positioning the load is faster, easier and safer. ☛ Fast and accurate load positioning with True Lift as standard, which means the hook moves horizontally only 5mm during a one-metre lift. ☛ Ergonomic hook design, which makes rigging of the load safer, while the rope drum to rope diameter ratio is more than double conventional designs. The innovative design of CXT hoists, with a large rope drum

diameter, reduces the stress and wear of the lifting rope. ☛ Special features for Khanom including two-step limit switch on the trolley travel (SlowStop) and two motors drive with separated gearbox and overspeed mechanical brake. Mr Subesak says KEGCO values safety, reliability and efficiency in all lifting operations “So we rely on Konecranes global knowledge, coupled with local expertise, to provide top standards of preventive maintenance. And it is good that Konecranes can help us with safety inspections, because this is an important and timeconsuming job.” “We get good support all year, with teams of three Konecranes people out for routine inspections and four involved in the annual inspections. They all fit in with our own people very well – we know them very well and we’re happy with that and with the crane availability and reliability rates we have achieved working together.” Konecranes is a world-leading provider of lifting and maintenance solutions, with a track record in pioneering, leading and shaping developments in the industry. Annual sales in 2008 exceeded 2.1billion Euros. nextSTEP Visit:




Cambodian Root Server to Speed Internet Access


ekongNet, Cambodia’s largest Internet Service Provider, in partnership with the Asia Pacific Network Information Centre (APNIC) and the Internet Systems Consortium, launched an f-root server in August 2010.The nation’s first root server, deployed in Phnom Penh, has been operational since July. There are a total of 13 root servers in the world and the f-root server has 49 instances around the globe. As part of the root server launch in Phnom Penh, MekongNet and APNIC conducted a DNS and DNSSEC (DNS Security) workshop for interested community members. Mr Champika Wijayatunga, APNIC Training Manager said the workshop introduced the benefits of the new root server to the Cambodian community. “We would like to give the Cambodian community the opportunity to learn about the benefits of having a root server in Cambodia as well as best practices in DNS infrastructure management,” Mr. Wijayatunga said. Since 2007, APNIC and MekongNet have collaborated to provide APNIC Training courses to the Cambodian Internet community. Speaking at the launch, Mr. Wijayatunga explained the dynamics of root servers as well as their strategic benefits, saying, “Launching the first root server in Cambodia will bring significant improvements in both speed and reliability to Internet users in Cambodia. This is especially so in terms of faster domain resolution and increased resilience, which means an overall increase in the speed and reliability of Internet access for users.” APNIC Director General Paul Wilson added: “The deployment of this root server in Cambodia is a positive example of the way rapid development of the Internet

in the Asia Pacific is being supported through collaborative work between APNIC as the Regional Internet Registry and members of the Asia Pacific Internet community. “APNIC aims to support these developing economies by meeting the increasing demands for training and other services,” Mr Wilson said. Root servers are a critical part of the Internet’s DNS, providing information about authoritative servers for Top Level Domains (TLDs). Computers need this information to support many types of Internet activities, like interpreting URLs and email addresses. As one of five Regional Internet Registries (RIRs) in the world, the Asia Pacific Network Information Centre (APNIC) is a not-for-profit, membership-based organization charged with ensuring the fair distribution of IP addresses and the related numeric resources in the Asia Pacific region. Responsible management of these resources is vital for the stable and reliable operation of the Internet. Internet Systems Consortium, Inc. (ISC) is a non-profit public benefit corporation dedicated to supporting the

infrastructure of the universal connected self-organizing Internet—and the autonomy of its participants—by developing and maintaining core production quality software, protocols, and operations. Since 1994, ISC has operated FRoot (one of the 13 root DNS servers) as a public service to the Internet. “MekongNet” is a registered trademark under Angkor Data Communication Group Co., Ltd, established in 2005. It is a fullyfledged Internet Service Provider, with a license for the provision of Internet Service Provider (ISP) and Internet Exchange Provider (IXP) granted by the Ministry of Post and Telecommunications of Cambodia. “MekongNet” has invested heavily in developing the Cambodian telecom industry, including more than two years spent delivering the latest, highquality technology at exceptional value. Recognized as a serious and aggressive technology player with the ability to provide a wide range of 24/7 high-speed Wireless and Optical Fiber last-mile technology Internet access options to residential and corporate customers. nextSTEP Visit:

Temple at Prey Kongreach, Combodia




Latin America must see China as a trade threat, as well as a partner


ajor Chinese investment in Latin America is now a regular event: Sinopec’s $7.1bn investment in Repsol’s Brazilian unit is just the latest example. Such deals are rightly celebrated with fanfare in Latin America. However, the long-run effects are uncertain - especially given that Latin American exports are losing badly to their Chinese counterparts in world markets.

Latin America needs to diversify its exports - away from oil, iron, soya, meat and the like - if it is to grow sustainably. Unfortunately, as the region has focused on selling its commodities to China, Chinese firms have been outcompeting Latin American manufacturing exporters at a frightening pace. In the 1980s and 1990s, Latin America looked to the US as a core economic partner, adopting the Washington Consensus in order to attract US investment and gain better access to US markets. Alas, in the twenty years up to 2002, Latin America grew by barely one per cent a year in per capita terms. Enter China. It has served as a new and more dynamic destination for Latin American produce: buying $44bn worth of the region’s exports in 2009, ten times more than in 2000. In addition, Chinese demand for those exports - 80 per cent of which are primary commodities played a key role in driving up global prices. Thus China has helped boost economic growth in Latin America. However, Latin America has lost sight of the need for export diversification. In our new book, The Dragon in the Room, Uruguayan political economist Roberto Porzecanski and I calculate the extent to which Chinese companies are outcompeting their Latin American counterparts. We draw on the methods of the Asian Development Bank to examine data for thousands of sectors and sub-sectors. A Latin American manufacturing export sector is classified as “under threat” from China, if China’s market share is increasing while a Latin American counterpart’s share is decreasing. A

“partial threat” occurs when Latin American exporters are penetrating global markets, but their Chinese counterparts are doing so at a much faster rate. Our analysis finds that 92 per cent of Latin America’s manufacturing exports were under threat from China by 2009, representing 39 per cent of Latin America’s total exports. Brazil is heavily exposed. Eightyfour percent of its manufacturing exports are under threat, representing 28 per cent of its total exports. Forty-three percent of Brazil’s manufacturing exports go to other Latin American countries, serving as a key anchor market for Brazilian companies. Yet 65 per cent of those markets are under threat from China. As this chart shows, Brazil may already be feeling the effects. Mexico is also in a grave situation. It has the most similar export basket to China and, like China, relies on the US as its source of (export) growth. Ninety-seven per cent of Mexico’s manufacturing exports are under threat from China, representing 71 per cent of all Mexican manufacturing. Only in car and truck production does Mexico “threaten” China in the US market. This is largely due to the fact that cars and trucks are heavy to transport and Mexico enjoys a locational advantage over China. Moreover, NAFTA includes a localcontent standard requiring that a certain percentage of cars in North America be manufactured there. As recently as 2001, China and Central America were on a par, each selling about $6.5bn worth of apparel to the United States and each holding a 12 per cent share of

Financial Times, By Kevin P. Gallagher the American apparel market. In 2005 the Central American Free Trade Agreement (CAFTA) took effect. By lowering tariffs and locking in access to the US economy, CAFTA was supposed to solidify Central America as a clothing hub. Instead, clothing exports from Central America to the US plunged 25 per cent from pre-CAFTA days to $5.6bn in 2009. Central America’s share of American apparel imports has slipped to 8.7 per cent, while China now enjoys a commanding 38-per-cent share. Latin America would do well to learn from China. Unlike its Latin American counterparts, the Chinese state has been actively enabling Chinese firms to expand their technological capabilities and go global. For example, Huawei, the Chinese telecom giant, received $10bn of credit from the Chinese Development Bank. So far only Brazil is beginning to think along these lines. It is the single Latin American nation that spends more than one per cent of GDP on research and development (as China does) and has an active government policy focused on industrial competitiveness. Brazil also bargains hard with China, awarding China an iron mine on condition it also builds a steel plant. The Brazilian development bank recently set up offices abroad to assist Brazilian exporters. More Latin Americans should follow that lead. © The financial Times Ltd 2010 Kevin P. Gallagher is an associate professor of international relations at Boston University and a senior researcher at the Global Development and Environment Institute at Tufts University. With Roberto Porzecanski he is co-author of The Dragon in the Room: China and the Future of Latin American Industrialization (Stanford University Press, 2010).




Global materials handling leaders focus on Chittagong


he historic port of Chittagong on the Bay of Bengal is undergoing a renaissance as infrastructure and economic development in the region drive rapidly expanding trade volumes through this major export/import centre of Bangladesh.

The bustling city of 3.5 million has seen container volumes treble to more than a million containers a year over the past decade as the emerging economies of Asia including neighbouring giant India power their way into the 21st century. Developments such as the Asian Highway - an international network of 141,000 km of standard highways crisscrossing Asian countries - are expected to further expand regional cooperation among the mainland countries of Asia and to further stimulate development in Chittagong, a trading centre which dates from at least the fourth century B.C. when Malayan history chronicles the journey of the sailor Buddha Gupta from Chittagong to Malaya. It has evolved from ancient times as a major Arabian port, then Portugal’s Porte Grande and later as a strategic site of allied operations during the Second World War. Trade is forever the city’s lifeblood, with most of Bangladesh’s export and imports counted among the 30plus million tons of cargo handled annually at the rapidly modernising port, where a window berthing system was introduced in 2007 to facilitate accurate arrival and departure times for ship operators. “We can see container volumes easily trebling again in the next five years, reaching two,three or four million containers or more” said local business leader and former Chittagong Ports Authority senior engineer Mr Zahirul Hoq. “Bangladesh’s own national export growth is sufficient to double or treble exports by itself over the coming

decade, even allowing for the economic slowdown having its major effect in developing countries later this year and early 2010. Then there is the positive impact of the Asian highway, on which good political and physical progress is now being made - and the opportunities opening up with India’s seven “sister” states around Bangladesh seeking an outlet for their wares,” said Mr Hoq, who is Director (Equipment) of Allied-Steel (HK) company, Bangladesh agent for the global Konecranes lifting businesses. Konecranes is integrally involved in the expansion of the port through major Bangladeshi company KDS Logistics Ltd. KDS Group installed further worldclass Konecranes lifting technologies as it expands its operations, originally founded on the clothing business but now extending through KDS Logistics into the country’s largest and most modern Inland Container Depot (ICD). This facility is capable of holding 20,000 containers at any one time on a 20-hectare (46-acre) site in a congestion-free area on the outskirts of Chittagong, on the Dhaka Chittagong highway 25 minutes from the sea port. With a real-time computerised truck

Swedish-based Konecranes’ Lifttrucks

handling facility, computerised weighbridge and space for 700 trucks inside its secure environment, the ICD features a container Freight Station build to world’s best standards that can handle 120 trucks under cover simultaneously, for loading and unloading (stuffing and unstuffing) of goods such as cotton, jute and food products. The Konecranes fleet employed on the site included a fleet of four SMV 7/8 ECB 90 empty container handlers and three SMV 4531 TB 5 reach stackers. These were based on the latest ports handling technology of Konecranes, which employs more than 9700 people at more than 485 locations in 43 countries and has more than 366,000 cranes of all brands under service contracts. The company is a world-leading provider of lifting and maintenance solutions, with a track record in pioneering, leading and shaping developments in the industry and an enduring strength in ports and materials handling. Leading the way in the application of Canbus technology and electronic controls for lift trucks, Konecranes extended its revolutionary system to provide real time data about the controls, hydraulics, engines, transmissions and spreaders, which can be downloaded remotely and stored for analysis. Using “Eco Drive System” port operators can track drivers in terms of fuel consumption, productive hours, time driving versus lifting, container lifts to name a few. Swedish-based Konecranes Lifttrucks opened its second production facility in 2007, in



focus Shanghai, China which is now the Lifttrucks Production, Sales and Technical Support hub for the AsiaPacific region. Singapore is enhanced as a regional sub-hub with a recent relocation to larger premises. The Shanghai plant assembles Empty Container Handlers and Reach Stackers of the type employed by KDS. Key components are imported from Europe with emphasis on quality and knowledge transfer from Sweden. Konecranes believes the Asia market is receptive to latest technology and has adopted the strategy of maintaining the brand’s good reputation of superior performance. Not only is the Konecranes technology efficient, but the lift trucks are also well equipped for safety and environmental aspects, such as minimising noise and carbon pollution. Environmental concern and safety are built in with Konecranes. Quality is built in, right through from performance to aesthetics, which also can be important, because presentation is important in the marketplace.

In association with Allied Steel, KDS has showcased for Konecranes technology, demonstrating efficiency and productive capacity to other companies in the region that have not previously been exposed to the brand. Sales have followed to Chittagong Container Transportation Co (two empty container handlers) and Incotrade Limited (reach stacker). More are being negotiated. The General Manager of Konecranes Pte Ltd, Mr Steve Gagnuss, says the company’s focus on quality and local production in Asia is paying dividends. “Konecranes as group has adopted an aggressive growth strategy in Asia with its China and broader Asian workforce now exceeding 1000 people. Through sales and service centres throughout China and through the broader south Asia region of Konecranes Pte Ltd, we have been able to rapidly build an enduring market presence in ports, logistics and other markets. “Our latest generation of reach stackers builds on many years of development work and close partnership with our customers. This means that we can offer a highly modern lift truck based on carefully

selected components and a fuelefficient engine that delivers high torque even at low rpm. “Customers also get access to a string of innovative solutions to simplify their work. Konecranes is proud to claim to be the only company with load-sensing ‘power-on demand’ hydraulics on all of our trucks, from empty container handler to the largest top-loaders and reach stackers. Unlike conventional hydraulic system that require high power output, the load-sensing system adapts the engine power the load weight lifted, resulting in better fuel consumption and less engine wear, along with reduced emissions. “Konecranes is confident and committed to the Asia region as a lifting company. One example of this is the fact that is Konecranes has been rewarded with an order for four new-generation rubber tired gantry (RTG) cranes from Indonesian port operator PT Terminal Petikemas Surabaya (TPS). Konecranes’ strategy is based on the combination of capitalising their extensive service network, leading technology, fast paced industrial consolidation, and a focus on efficient supply chains.

From page 25

Penang Port’s main line vision shared by Konecranes group which is very important. All our cranes have to be certified and safety is part of our responsibility as a caring employer with world’s best practices,” said Mr Asri. Konecranes has been involved with PenangPort since 1994, when the company took over all facilities and services from the Penang Port Commission, which licenses Penang Port. The port which deals extensively with cargo from countries including Malaysia, Thailand and Indonesia – aims to be the premier port and logistics chain integrator in the region. The General Manager of Konecranes Pte Ltd, Mr Steve Gagnuss, says PenangPort shares Konecranes global best practices emphasizing the importance of

preventive maintenance and continuous modernisation of equipment. “For these activities, Konecranes has formed a global division, Konecranes Port Services, which provides service around the world and combines our port services resources in all major markets. “This huge pool of experience enables us to apply locally through our on-site expertise the benefits of complete service for all makes and brands of port and harbour cranes.” Konecranes is a world-leading provider of lifting and maintenance solutions, with a track record in pioneering, leading and shaping developments in the industry.

Konecranes South Asia Pacific region clients include Alstom, BHP Billiton, General Electric, Hyundai Heavy Industries, Lihir Gold, Siemens, Samsung Heavy Industries, Ratchaburi Power Station, Thaikraft, Toshiba, Uncle Tobys, Dung Quat Refinery, Shell Eastern Petroleum, IHI Corporation, Hwa Yew Iron Works, Univac Precision Engineering, Schlumberger, Sembawang Shipyard, Syscon Private Limited, Horizon Singapore Terminal, Land Transport Authority, Changi Water Treatment Reclamation Project, and Tricaftan Environmental Technology. nextSTEP Visit:



Better Business Throughout Asia

Asia Manufacturing News February 2011  
Asia Manufacturing News February 2011  

Asia Manufacturing News February 2011