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Haier pins hopes on Japan sales
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Workers carrying a box containing a Haier product in Tokyo. The appliance maker expects robust sales as demand for refrigerators and washing machines grows in Japan. [Bloomberg News]
Haier Group, the world\’s biggest refrigerator and washing machine maker by volume, said Japanese demand will help sustain sales-growth "momentum" this year after revenue grew more than 10 percent in 2009.
The appliance maker, based in Qingdao, eastern China, forecast rising sales in Japan as consumers in the world\’s second-biggest economy are increasingly "putting value at the same level as branding", President of Asia Pacific operations Philip Carmichael said in an interview in Hong Kong.
Haier, with goods sold in 60 countries, bought 20 percent of New Zealand\’s Fisher &Paykel Appliances Holdings Ltd last year and plans more acquisitions and alliances to expand its brand. The closely held maker of freezers, air conditioners and televisions is designing a product line specifically for Japan, its third biggest market, Carmichael said.
"Haier as a Chinese company has made great inroads overseas," Jing Ulrich, Hong Kong-based chairwoman of China equities and commodities at JPMorgan Chase &Co, said in a Bloomberg TV interview. "The Haier name is becoming better known around the world day by day."
Qingdao Haier Co, the company\’s air-conditioner and refrigerator unit, rose 2.9 percent to close at 21.46 yuan in Shanghai trading. The stock has more than doubled in the past year.
Haier Electronics Group Co, which makes washing machines and water heaters, rose 0.8 percent to HK$4.82 in Hong Kong and has surged more than fourfold in the past 12 months.
\’Very strong year\’
"We had a very strong year in 2009 in Japan and we\’re going into quarter one now with strong momentum, new products and increased awareness," Carmichael said in Hong Kong. "I expect that momentum to continue into 2010."
Japan is the third largest market for home appliances with China being the biggest, followed by the US, Carmichael said. Haier was the world\’s top selling brand of refrigerators and laundry appliances by retail volume last year, according to Euromonitor International.
Refrigerator and washing machine sales by volume fell 3 percent and 7 percent respectively in the first six months of last year, according to an August report made by GfK Marketing Services Japan Ltd. Refrigerator sales by value rose 7 percent, while they fell 4 percent in the case of washing machines.
Market share
Panasonic Corp was the biggest maker of refrigerators in Japan with a 23 percent market share by volume, GfK said. Haier ranked seventh with 4 percent.
Toshiba Corp was the biggest washing-machine maker with 26 percent of the market, followed by Hitachi Ltd and Panasonic, while Haier ranked sixth with 2 percent market share, according to GfK.
Haier last year paid NZ$46 million ($33.7 million) for a 17 percent stake in Fisher &Paykel, allowing it to expand marketing and distribution rights of that company in China, and sell Haier-brand products in New Zealand and Australia.
In 2005, Haier pulled out of a bid for US appliance maker Maytag. Whirlpool Corp bought Maytag for $1.68 billion in 2006 to create the world\’s biggest appliance maker by sales.
Carmichael said sales would also continue to grow this year in China. "The Chinese stimulus package is driving economic activity," he said in a separate interview on Bloomberg TV.
China\’s makers and retailers of home appliances are benefiting from government stimulus measures aimed at boosting domestic consumption. China\’s 4 trillion yuan stimulus package includes cash subsidies for purchase of washing machines, refrigerators and computers.
"This is absolutely the right industry and we\’re quite bullish on domestic consumption stories in China," JPMorgan\’s Ulrich said.

Shaolin Temple not to go public: abbot
The abbot of China\’s famed Shaolin Temple said Thursday that the temple will not be listed in the stock market.
In addition, Shaolin Temple will not become a shareholder or join in the business operation of the newly established tourism company in Dengfeng City of Henan Province, where the temple lies, Shi Yongxin said at a press conference.
The legal rights and interests of Shaolin Temple had been well protected according to Chinese laws of religious affairs and will not be affected by the new firm, he said.
Shi made the remarks four days after a joint venture was established between the Dengfeng city government and the Hong Kong-based China Travel International Investment Hong Kong Limited, a subsidiary of the state-owned China National Travel Service (HK) Group Corporation (HKCTS).
The new company had come under spotlight as earlier reports said the government of Dengfeng was trying to have the religious place listed in the stock market.
The rumors had sparked criticism on the Dengfeng government, as critics say the agreement would hurt the feelings of Shaolin monks and religious people.
Both the Dengfeng government and a senior HKCTS official had denied the reports earlier this month, saying the Shaolin Temple will not be managed by the new joint venture.
Shi said at the press conference that he welcomed HKCTS to do business in Dengfeng, but reaffirmed that Shaolin Temple will never participate in commercial operation of the joint venture as its core functions are to organize religious activities to meet the demand of religious followers.
The Shaolin Temple, built 1500 years ago during the Wei and Jin Dynasties, is famous for Buddhist teaching and Chinese martial arts, particularly Shaolin kungfu.
Shaolin, which has become a household name around the world, has developed business operations such as kungfu shows, film production and online sales under the leadership of Shi Yongxin.

China BlueStar starts coinstruction of largest RO membrane project
China National BlueStar (Group) Co., Ltd. began construction of China\’s largest reverse-osmosis (RO) membrane project in Beijing Monday.
China BlueStar holds 49.9-percent and Toray a 50.1-percent stake in the project. The investment totals 530 million yuan (77.60 million U.S. dollars), according to BlueStar Co..
The plant is scheduled to go into production in October 2010 with an annual production capacity of 6.18 million square meters of RO membrane and 130,000 RO membrane elements, according to BlueStar Monday.
Reverse osmosis is a filtration process typically used for water purification. An RO membrane filters water by only allowing oxygen and hydrogen atoms through and filters out all solid matter.
RO membrane products are also applied in the pharmaceutical, sewage treatment, petrochemical, metallurgical and electronics industries. China\’s production of such membranes has lagged behind its huge demand.
Xi Yuxin, spokesperson of BlueStar, said Monday China would need much more RO membrane than it could currently produce. Around90 percent of the membranes used by domestic companies were imported.
As a subsidiary of the state-owned ChemChina Group Corporation, BlueStar Co. focuses on chemical products and new materials. Toray Industries, based in Tokyo, is a world leader in chemical manufacturing.

CHICO to expand operations in Liberia
A Chinese company operating in Liberia Monday has unveiled its plans for the West African nation, promising to expand its operations?in the mining, agriculture, and electricity sectors.
China Henan International Cooperation Group of Companies Limited (CHICO) said although it came to Liberia under an agreement reached with the World Bank and the government of Liberia to construct and rehabilitate roads, it has already began mining exploration in the country.

The company\’s Vice Director Liu Shanliang told Xinhua that its team of explorers is in the Western Liberian mining concession area of Bomi, one of the west Liberian counties, and has embarked on massive exploration of the country\’s mining concession area in that part of the country.
Liu said the latest exploration started in early 2009, and plans are in the process for the company\’s mining exploration to be extended to northern Liberia, where it has requested the Liberian government to allow it to carry out mining at the highly rich mining area of Wologisi, located in Liberia\’s biggest county of Lofa.
"We also have plans to engage in agriculture; we intend to bid to do water supply by December this year and repair and construct drainages; engage in power projects and the construction of sub- stations," he said.
Liu said the decision by the company to carry out all of these initiatives clearly shows that it intends to stay in Liberia for long, as it has been operating in other countries like Senegal, where it has operated since 1980 as well as nations across Africa like Tanzania, Mozambique, Zambia, Namibia and Guinea, where it is currently active.
"We will also in the not too?remote future begin oil exploration, "he assured.
Since its arrival in Liberia in 2007, after it won a bid to reconstruct roads in Liberia, CHICO has?built most of the roads in Monrovia city and its environs. The company is currently extending its road construction work in Liberia\’s interior and according to the Liberian government by the end of the dry season massive operation mainly in the interior side will begin on a full scale.

Daewoo in Myanmar gas deal
A consortium led by South Korea\’s Daewoo International will invest about $5.6 billion to develop Myanmar gas fields as part of a 30-year natural gas supply deal with China, a group member said yesterday.
The investment comes just a week after China signed a $41 billion liquefied natural gas import deal with Australia.
The Myanmar gas development plan will allow the consortium to supply natural gas to China\’s top oil and gas firm, China National Petroleum Corp (CNPC), with a peak daily production of 152.4 million cu m, or about 3.8 million tons annually.
A CNPC spokesman yesterday said he is not aware of the deal.
The supply, due to be available from 2013 from the Shwe and ShwePhyu fields in Myanmar\’s A-1 offshore block and Mya field in A-3 offshore block, amounts to about 7 percent of China\’s current gas consumption of about 2.225 billion cu m per day.
Currently meeting only 3 percent of China\’s total energy needs, gas use is set to grow at a 10 percent compound annual rate to about 5.49 billion cu m per day by 2020, according to Bernstein Research.
Daewoo has a 51 percent stake in the consortium. The other shareholders are India\’s Oil and Natural Gas Corp with 17 percent, Myanmar Oil & Gas Enterprise with 15 percent, India\’s GAIL with 8.5 percent and Korea Gas Corp with 8.5 percent.
Daewoo will spend $1.68 billion in initial investments for five years until 2014, and KOGAS will spend $299 million, the two firms said in separate statements.
A KOGAS official said the total investment by the consortium would amount to about $5.6 billion, including $4.6 billion in initial spending.
The consortium will undertake production and offshore pipeline transportation, while land transportation to China will be jointly managed with China National United Oil Corp (CNUOC).
The investment still needs approval from the Myanmar government, and CNUOC has yet to decide details of its investment for land transportation to China.

Cosmetics firm Elizabeth Arden expands in China
US cosmetics magnate Elizabeth Arden Inc is expanding its makeup and skin care counters to China\’s second-tier cities, even as it penetrates deeper into existing markets in more affluent cities such as Beijing and Shanghai.
"We have gone to all the key cities in China and are already in some second-tier cities, where we think consumers have a need for prestige beauty products," said Sebastian Clifton-Welker, the Asia Pacific & Oceania marketing director for Elizabeth Arden International.
Even though they lack the disposable income of consumers in first-tier cities and have not been as exposed to Western lifestyles, Elizabeth Arden hopes its testing counters will allow new customers to try out the company\’s cosmetics products.
"We are enthusiastically expanding our testing counters so they can have access to Elizabeth Arden products for whenever they are ready to buy our products," said Smith Chih-Hsin Chen, president of Elizabeth Arden Greater China.
Elizabeth Arden already has established locations in 77 cities. The company has 150 beauty counters, which they plan to expand to 200 in 2010.
"In China, average spending on our products is 800 yuan for each transaction," Chen said.
The numbers and expansion plans are impressive given that Elizabeth Arden joined the Chinese market only in late 2005, much later than other international cosmetics brands such as Estee Lauder, Lancome, Chanel and Dior.
Growth market

Elizabeth Arden Inc opens a new counter in a premium department store in Beijing. The US-headquartered cosmetics giant is striving to enter China\’s second-tier cities and offer more Chinese consumer-tailored products. [File Photo]

Like many of its competitors, Elizabeth Arden is now focusing on China as a growth market, Clifton-Welker said.
The report "Cosmetics and Toiletries Market in China" from the market research firm RNCOS stated that China\’s skin care market is expected to grow 12.5 percent annually from 2008 through 2012.
Much of the focus for Elizabeth Arden will be on skin care versus makeup.
"Skin care products make up 80 percent of the beauty industry\’s product share and cosmetics only about 10 percent," Chen said.
Since Chen joined Elizabeth Arden in early 2006, he said he has sought to make the company a trusted brand.
Testing, or "first-touch", counters are an important way to allow consumers a chance to personally try the Elizabeth Arden brand, he said.
"That is why I set up more counters in the past three years for people to get a first-hand touch," Chen said.
"It\’s also important to maintain brand value," he added. "If faulty products appeared on the market, there would be no brand value left."
Chen said he is not worried about competition from inexpensive domestic brands.
"Those who use those inexpensive local brands today might turn to Elizabeth Arden another day," Chen said.
Chen said Elizabeth Arden now only accounts for about 1 percent of the market for beauty products in China.
"In addition to getting a larger share from that untapped 99 percent, I will also work to maintain the 1 percent I\’ve got," Chen said.
Chen conceded it\’s difficult to build and maintain customer loyalty when two-thirds of women make "irrational" purchases.
"Therefore, we have to set up counters so that customers can reach us whenever they want to buy skin care products, either rationally or irrationally," he said.
Since China adds on charges of 10 percent for duty and 17 percent for value-added taxes on imported beauty products, many domestic consumers turn to duty-free shops in foreign countries or in Hong Kong.
But Chen said he is not worried whether the practice is affecting sales on the Chinese mainland.
"I\’m happy, because Hong Kong sellers are helping by nurturing and educating a potential consumer base for me," he said.
Adding \’whitening\’
Understanding that Chinese women favor cosmetics that produce "whiter" skin, Chen said Elizabeth Arden developed "whitening" skin care products for the market.
"We understand that if our brand wants to make a splash in the Chinese market, we have to invest more in research and development of whitening products," Chen said.
To that end, the company in 2007 in Asia launched its White Gloves line, which later became a popular seller in the Chinese market.
Elizabeth Arden also is introducing anti-aging skin care products to China.
The company introduced its Prevage line of anti-aging facial products to China on Aug 18 to increase its market share in this fast-growing skin care sector.
Prevage products contain the anti-oxidant ingredient Idebenone, which is a bioengineered molecule that is 60 percent smaller than Co-Q10, which is naturally found in the human body and works to combat the damage caused by harmful free radicals. But the Co-Q10 molecule is too large to cross the barrier of human skin, researchers said.
"In essence, we are not aging, we are oxidizing – rusting in our suits of armor," said Joseph A. Lewis, a cosmetics research scientist who developed Idebenone.
In China, where many consumers believe natural ingredients such as herbs are of higher quality than synthetic ingredients, Lewis said it\’s a matter of letting consumers know that synthetic ingredients can be safer and more effective.
"The assumption that a natural molecule is always good is not exactly correct. There are a lot of very toxic natural molecules such as the venom in bee stings and snake bites," Lewis said.
Lewis said Idebenone can penetrate skin and mitigate the same kind of oxidative stress that can cause metal to rust or apple slices to turn brown.
"No other natural molecules have the same effect," he said.

Traffic jams good for China TransInfo

A new series of GPS (Global Positioning System) sensors are displayed at the International Auto Accessories Exhibition held in Beijing recently. China TransInfo has just launched multi-city, real-time traffic information services based mainly upon GPS sensors installed in cars and along roadsides. [CFP]

Traffic jams that can be a daily nightmare for big city commuters are proving a business opportunity for China TransInfo Technology Corp.
China TransInfo, a leading provider of public transportation information systems technology in China, recently launched China\’s first multi-city, real-time traffic website and mobile phone software.
Initial coverage for the traffic website, called PalmCity, is in the cities of Beijing, Shanghai and Chongqing, as well as in the Sichuan province city of Chengdu and Wuhan in Hubei province.
PalmCity provides real-time traffic conditions, as well as traffic events and street closure information to the five cities.
Chengdu will become the first of the five cities to also receive information about available parking spaces, according to the company.
Real-time information
China TransInfo also recently introduced the multiple-city, real-time Traffic Jam Index, which will classify each city\’s traffic as seriously congested, congested, mildly congested, smooth or very smooth.
"With the dramatic increase in the numbers of China\’s car owners and mobile phone users, we recognized a golden opportunity and bright future in the transportation information technology segment," said Li Gang, general manager of PalmCity.
"We believe that China\’s intelligent transportation information service market will mature in 2011 and then boom beginning in 2012," Li said.

China TransInfo CEO Xia Shudong said his company is the first to offer real-time traffic services for multiple cities in China.
China TransInfo\’s proprietary technology, based mainly upon GPS (Global Positioning System) sensors installed in fleets of taxis and also roadside sensors, offers the most accurate real-time traffic data and the largest urban coverage in China, Xia said.
"We are now making efforts to cooperate with more taxi companies to collect road information, which can help us update the data every five minutes," said Li of the company\’s PalmCity division.
In conjunction with the website launch, the company also introduced the first software in China that enables motorists to check real-time traffic conditions in multiple cities via their mobile phones.

Google China chief clarifies rumors
As rumors flew following Google China\’s ?President Kai-fu Lee\’s resignation last Friday, Lee said in his blog his reason for leaving was because his new job is "overwhelmingly exciting!"

"I work hard, not because I am poor, but because of my passion for work. To create my new company I will again undergo a process of building up a new career from nothing," Lee wrote in his blog on sina.com on Sunday.

He also denied in the article any connection between his move and Google China\’s recent rap over the knuckles for allowing access to pornography.

In June, Google China was found to have been illegally spreading pornographic content and its service has since been intermittently blocked.

Lee said he had met with government officials in July who had praised Google China\’s efforts to crack down on pornography. Further, Lee said, he had not been pressured to leave by Google headquarters.

"Actually, I postponed the resignation for two months just to deal with it appropriately," Lee wrote.

He also denied other rumors, such as tax evasion, receiving an offer of employment from Idealab, or Google\’s withdrawing from the China market.

On Sunday morning, Lee announced the name of his new company, "Innovation Works", and also its web address, at a news conference held by Google China.

Established to provide assistance to Chinese youth starting undertakings, Innovation Works plans to invest about 800 million yuan ($ 117 million) over the next five years, and it is also trying to attract investment from other enterprises such as Foxconn Technology Group, said an article published on sina.com.cn on Monday.

After Lee leaves Google China in mid-September, his engineering responsibilities will be taken over by Boon-Lock Yeo, director of the company\’s Shanghai engineering office. Vice president John Liu, who currently heads Google\’s Greater China sales business, will take on Lee\’s business and operational roles.

Lee was born in Taiwan in 1961. He was hired by Google in 2005 and helped greatly in its market expansion in China.

Chinese resources company plans expansion
CITIC Resources Holdings, China\’s sixth-largest oil producer by output, aims to buy oil and resource assets in Central Asia, Africa and China, China Daily reported Tuesday.
The newspaper quoted the company\’s chief executive Sun Xinguo as saying that CITIC Resources is eyeing "high-quality, profitable and good assets" with 4.3 billion Hong Kong dollars (about 554.8 million U.S. dollars) of cash on hand.
CITIC Resources is the oil and metals unit of CITIC Group, China\’s top financial conglomerate. It has oil assets in Kazakhstan, Indonesia and the Hainan-Yuedong Block in China.
The company posted a first-half net loss of 307.3 million Hong Kong dollars from a net profit of 520.1 million Hong Kong dollars a year earlier because of weak demand and falling prices, according to a company statement released late Sunday.

Unilever launches global R&D center in Shanghai
Unilever, the world\’s second-largest consumer goods maker, Tuesday in Shanghai launched its sixth global research and development center.
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About 450 research staff from 15 countries will work at the 50-million-euro R&D center that focuses on products development and basic research, said Paul Polman, Unilever\’s chief executive. He said Unilever had invested in China because it was a huge market.