13/06/2014 Asia Business Report


13/06/2014

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expected. Time for the latest business news.

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As World Cup fever takes hold in Asia, we look at how companies can

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catch in on the action. And how Indonesia's growing appetite

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for chocolate is fuelling a new business opportunities.

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Thank you for joining us for this edition of the Asia Business Report.

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You could not have missed it. Brazil has kicked off the World Cup in

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style, winning off the first match against Croatia 3`1. But this is not

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just about the fans. Football is big business. Companies have paid up to

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$200 million to associate their brands with what is one of the

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largest events on the global sporting calendar. FIFA is estimated

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to make more than $1.4 billion over the cycle. Several companies are

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signed on up to 2022. What about other businesses? The huge

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pricetag, the top tier sponsors will pay $1.3 billion just to associate

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themselves with the event. For a lot of companies, that is out of their

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price range. What Asian companies are trying to make money and the

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sponsor around the World Cup? The smart companies will attach

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themselves to the events. They are attaching themselves to football.

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Sony are launching their 3`D TV. Toshiba have a campaign left your

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home country wins the event, you get a TV free. They are not attached to

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the World Cup, but they are basking in the glow of football. What about

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the smaller Asian companies? How are they leveraging themselves around

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the World Cup? The smaller companies are using the fans to provide the

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content and the information. They are becoming the conduit. The

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smaller brands are helping the fans can act. They are producing contact

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content and material. It is all about the gimmicks. It is about who

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is the smartest brand. Meanwhile, India's new government

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starts work with looking at the economic challenges it faces. India

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spends more than $20 billion on making fuel cheaper for its people.

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But producing those subsidies is a sensitive issue.

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You would find a red cylinder like this one in virtually every Indian

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household. It contains gas that is used for cooking. The government

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gives every family 12 cylinders each year for $84. Less than half the

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cost price. But for many, with six mouse to feed at home that is not

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enough. TRANSLATION: It is not sufficient for my family. If I have

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to buy gas at the actual price, that is money we can spend on our

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children's education and health. A change in gas prices affect

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virtually every person in India. But subsidising the fuel is also a

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burden on the country's finances. India imports most of the fuel

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needs. Some of that is also spent on making diesel cheaper. The cost of

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this fuel has been at the centre of many political debates. During the

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last coalition, an important ally walked out of government because of

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a hike of diesel prices. Diesel is used in lorries like these, which

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transport everything from fruit and vegetables to consumer goods. Making

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the fuel more expensive means everything ends up costing more. But

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the new government won the next election with a majority. When you

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get aggressive towards the subsidy, it becomes unpopular. The government

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has come up with a mandate that has been given by popular demand.

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Especially in the context that people aspire to. These motorists

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will be watching what happens closely. But with high expectations

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at home to keep prices low and the show from credit ratings agencies to

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make India financially stable, this is a delicate balance the new

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government has to strike early in its time in power.

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In other business News making headlines, has the is opening up its

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patents for others to use. The firm's chief executive says the move

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is aimed at speeding up the development of electric cars. The

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firm sold just under 23,000 of the units last year. Expedia has become

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the latest company to accept bitcoin is as payment. It is restricting the

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trial to its US website. Water may be a scarce resource in many places,

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but it can also be crucial for businesses. Like Coca`Cola. We spoke

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to the director of the world switch programme run by Coke. There are

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certain times and places, take the midwest of the United States, take

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Northwest India, the north of China, water supplies are limited.

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That is being exacerbated by overuse. The amount of water that is

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replenished naturally, through rain, snow, ice, can not keep up with the

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amount of water being used by civilisation. Has water become the

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oil of the 21st`century? The comparisons to oil suggest a level

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of scarcity. And competition. While that is true in certain times and

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places, you can face water stresses from scarcity to quality, the amount

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of water on Earth is fixed. It is a finite resources. You cannot create

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or destroy it. It is renewable. Unlike fossil fuels. What's more is

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Coca`Cola going to do to respond to criticism that it is using up

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valuable resources in water stressed areas? The programmes, the partners

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and the progress we have made over the last ten years has shown an

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evolution immaturity of the understanding and response. It does

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not then we are done. The 500 projects we have with partners in

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3000 communities around the world, the investments we have made, it is

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the beginning. Water is always going to be required. There is always

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going to be something to do. With rising incomes, Indonesians

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have required a taste for chocolate. `` acquired. You would be hard

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pressed to find any good`quality chocolates made in the country.

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We find out how businesses are seeing opportunities for a

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home`grown market. Nobody would call these in

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Indonesian delicacy. Chocolates in Indonesia used to content more on

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milk and sugar and cocoa. `` than sugar and cocoa. But there is a

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growing appetite. The owners began selling chocolate 13 years ago. They

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started the business from home. But it has grown to 13 outlets. They use

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cocoa powder and butter from Belgium. We want to maintain our

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quality and it does not mean we are not trusting the quality of

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Indonesia, but we can export to another country. Some of the best

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cocoa beans actually come from right here in Indonesia. Like those grown

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by villagers on this island. This is where a lot of the cocoa beans come

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from. There is a variety of trees here. But these farmers make most of

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their money from cocoa. These beans and up on some of the best chocolate

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in Europe, not Indonesia. But things may be changing. An American food

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processing company has been sourcing cocoa beans from Indonesia for

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nearly 20 years. Now it is investing in a $100 million cocoa processing

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plant in Indonesia. Given the rapid growth of cocoa consumption in

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Indonesia and Asia and the fact that Indonesia is the third largest

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producing company in the world, the next step for the region would be a

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cocoa processing plant. Harvest time. The mood is jubilant.

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Good`quality cocoa has nearly doubled these villagers' income.

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There is hope for an even better future.

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All Asian stock markets are declining at this tour due to

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violence in Iraq and lack of economic news in the US. Thank you

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for joining us. Here are the headlines: President

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Obama says he is looking at all options to help the Iraqi government

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counter the Islamist

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