07/05/2014 Asia Business Report


07/05/2014

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AstraZeneca by its US rivals Pfizer. The American company has been warned

:00:00.:00:00.

not to use the UK as a tax haven. Now on BBC News, all the latest

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business news live from Singapore. Could it be the biggest stock market

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listing in history? Alibaba seeks billions from investors.

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Could Indonesian coffee become less available to foreigners?

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Welcome to Asia Business Report. I'm Rico Hizon. Starting with China's

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Alibaba. It has filed for a share sale in the US, which could make it

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as much as $15 billion. In initial stages of the filing, it hasn't

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specified how much stock will be sold or at what price. The online

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shopping giant operates a network of e`commerce services and brings in

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more money than Amazon and eBay combined. But how well known is

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Alibaba in the US? To give you an idea of how much

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interest it is already building, Yahoo has a 40% stake in Alibaba and

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investors are buying shares in Yahoo just to have some of its shares in

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Alibaba. There is already quite a bit of interest, despite the fact

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that it might not be as well`known and amongst regular kind of

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investors. ``kinds. The one thing that might hold investors back in

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the US is the complex web of businesses. That might deter some

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investors. $1 billion, US, is that realistic? It is probably going to

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be more than that. The $1 billion is really just a placeholder, a number

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they have to put. But most people believe they can raise anywhere from

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$15 billion ` $20 billion. If they accomplish that, it would beat

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Facebook's IPO. They decided to file in the US rather than their home

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base. Why? The United States allows for more control. That's what

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executives want. Alibaba proposed something different. Their

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shareholders, 20 members of the executive team, are able to vote on

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the people who are part of the board. That wasn't going to fly with

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regulators in Hong Kong. But it's something that was accepted here in

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the US, which is why they decided to list in New York. Now to a

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marketplace which facilitates consumer to consumer online

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shopping. Our team in China that with a user who set up her own

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business through this online portal. It is the supreme shopping platform.

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There is almost nothing you can't buy on it. People call me Lunar Mum

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on internet. I sell maternity and infant products. It was hard at the

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beginning. Every day I wouldn't finish before midnight and I had to

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look after my baby as well. Now I have eight staff, divided into

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morning and evening ships. ``shifts. I even have customer service and a

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graphic designer. We chat to customers online before finalising

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the orders. In the afternoon, we start sorting the goods according to

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orders. We pack them into parcels for the delivery men. When I

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started, I made 10,000 yuan every month. Now the income is 40 times

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that. All young people now shop online. Even older people are

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joining the trend. The website has transformed my life. I believe its

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influence is only going to increase. The successful user.

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China tries to rebuild its dairy industry. Demand for imports soared

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after the milk scandal of 2008 with authorities trying to help local

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producers claw back market share from suppliers in New Zealand,

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Australia and Europe. Stopping imports from producers who aren't

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registered with them. New Zealand is a major exporter of milk formula to

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China. I spoke to the head of a trade in Auckland and asked how this

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would affect his industry. Each year it is about 200 million New Zealand

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dollars of infant milk formula at the moment. This is a rising market

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for New Zealand with our free trade agreement signed in 2008. It is a

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part of our market that is growing and a part of the market that

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entrepreneurial companies have taken a share of. Of course now, the

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market is at risk. According to the control, suppliers have to be

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approved by mainland authorities and according to estimates, only six of

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the 30 suppliers were approved. How do you think this could impact in

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terms of production and revenues in the New Zealand baby formula

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market? What we will see is the initial audit covered the eight of

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30 companies. What we will see is pressure put on the brand holders,

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because, for some reason, the Chinese are looking at the brands

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and are looking to have the brands reduced. Whereas, from the New

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Zealand market I think they should look at the quality of the product

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being supplied. That will give accountability to consumers in the

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China market. There is no need to exclude part of our supply chain. It

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has been billed as one of the most high profile cases in Vietnam, an

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appeal will be ruled today for two sentenced to death for embezzlement.

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Both worked for a state`owned shipping company. The man on the

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left is a former chairman and the right is the company's general

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director. They were accused of siphoning half $1 million. I ask how

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this could affect investment in the country. Last year, Vietnam held an

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estimated 300 corruption trials are including this trial. And, a

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majority related to state`owned prices, showing immense problems

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within the state sector. That is what the foreign investors are

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worried about. They are worried about the lack of transparency and

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the lack of government rules and the rule of law. Without fundamental

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changes within the system, it is clearly politically motivated

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changes, I don't think it would be possible for the Vietnamese

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government to fight corruption. Foreign investors are aware of that.

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They demand something to happen within the system to make their life

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easier within Vietnam's. `` within Vitenam. If it is breakfast where

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you are watching, you might have had your first couple of coffee or at

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least he might be thinking about it. But do you know where it comes from?

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Indonesia is the world's fourth largest coffee producer and in the

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past is exported almost all of it. Now, Indonesians are demanding

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better coffee and that is expected to put a shotgun exports. Afternoon

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coffee. It is fast becoming Indonesia's

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pastime. This couple opened this shop last year. She admits business

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is slow but she is confident that the future is bright. Older

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generations like my father or uncle, the way they drink coffee, they just

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drink the popular Indonesian instant coffee or they just put water over

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the ground coffee and they drink the sediment. Now, the young generation

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drinks espresso, cappuccino. This is where all of that coffee comes from.

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These are unprocessed coffee beans. In the past, Indonesian farmers

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would pick the beans indiscriminately. It is faster but

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the result is a lower quality coffee. Now, it pays to pick only

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the best beans. This man has been a coffee farmer for more than 20

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years. He first learned about the plant on his grandmother's farm.

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But, until recently, nobody taught him how to produce high`quality

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coffee. He is all smiles while picking the best beans. TRANSLATION:

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I used to sell one kilogram of regular quality coffee beans. For

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the superior quality, people are willing to pay almost three times

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the price. The best Indonesian coffee used to

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be mainly for exports. This exporter sells specialty coffee, the highest

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in the trade, locally and overseas. The majority will be local. Locals

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will consume it. Mid to upper class. We do not expect foreigners, because

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our biggest market is our growing mid`upper`class. But the bulk of

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Indonesian coffee still has to go overseas for some time as it had

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enough demand in the country. But farmers are increasingly setting the

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price for the popular commodity. Thank you for investing your time

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with us. The sport is up next. The top stories this hour: Eight more

:10:41.:10:43.

schoolgirls have been abducted in Nigeria. The US is sending a team to

:10:44.:10:49.

help the Nigerian government find the hundreds now missing.

:10:50.:10:52.

As Russia rejects plans for new talks over Ukraine, NATO

:10:53.:10:53.

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