12/09/2016 Asia Business Report

To the rescue. Cash-strapped handling shipping gets help from its

biggest shareholder. And in Indonesia, seaweed farmers are

battling against an oil firm in a multimillion dollar lawsuit. --

Hanjin Shipping. Hello and welcome to Asia Business

Report, I'm Sharanjit Leyl. South Korea's Hanjin Shipping has been

thrown a financial lifeline, its biggest shareholder Korean airlines

has agreed to extend the firm more than $50 million and the money will

help it an low billions of dollars of cargo currently stuck at seat.

Ports, tugboat operators and cargo handling firms have refused to work

for Hanjin over fears they would not be paid because of its bankruptcy.

Earlier I spoke to an expert from a maritime research firm and asked if

Hanjin's fortunes have turned a corner. It is more like emergency

funding to unload the cargo stuck at seat. I don't see Hanjin coming back

from the ashes in that sense, it is more like emergency help to get the

cargo offloaded to the retainers. $14 billion worth of cargo we are

told stuck at seat, potentially not getting to the vital American

shopping season and it could potentially ruin Christmas people

are saying, is it that bad? I think that is a bit far-fetched in that

sense but it will impact global supply. Looking at the big shopping

season, the Christmas season, lots of cargo, about $14 million, on 80

ships, so every handbag or anything like that all electronics... Samsung

has said that it will affect things and it has things on the Hanjin

ships. It will affect the supply chain. But it is seamless and we

have seen stress on one part of the supply chain and it is affecting

retailers. We know the global economy is slowing down somewhat but

did we see this coming? Did anybody anticipate this happening with

Hanjin? There was some stress and this is company specific with Hanjin

because of the debt it was carrying. But global trade has not helped and

companies have continued to expand. The industry has been under pressure

for some time and it was not unexpected in that sense but

bankruptcy was the one extreme that happened here. The industry has been

an pressure you say so could this affect other shipping lines as well?

-- under pressure. Hanjin is unique because of the debt it was carrying.

They are in, under financial stress but I wouldn't call anyone on the

verge of bankruptcy at the moment. India's Tata Steel will report

quarterly results later today and apart from the numbers, industry

watchers are also waiting on an update regarding recent attempts to

sell off UK operations, which have been talking up huge losses. Ahead

of the financial results we have this preview.

If you talk about Tata Steel there are two sides to the company, the

struggling European operation at the centre of attention. It's estimated

the company has been losing over ?1 million every day when it comes to

its UK operations. It's also its largest market in Europe. But if you

look at Tata Steel's performance in India, it's an entirely different

story. The company has been consistently profitable. In fact, in

the last financial year it made a profit of over $700 million. But the

problems in the European market have been weighing the larger company

down for some time now. Last year Tata Steel reported a loss of nearly

$500 million. So what does that mean for Tata Steel? Analysts expect the

company to keep making profits in India because demand for steel is

rising over here on the back of fast economic growth. Tata Steel's plans

of selling off its UK operations hit a roadblock after Brexit. Now the

company is in talks with other steelmakers to merge its operations

in the European market. Investors will be interested to know if those

plans are making any progress. In other business news, Samsung is

now asking users to stop using their Galaxy Node Seven smart phones

immediately and to change them as soon as possible. The company is

undertaking a global recall after reports of the phone catching fire.

Multiple global airlines have either banned the phone from flights or ask

users to keep them turned off or in checked baggage. Japanese machinery

orders are key indicators of capital spending and they unexpectedly rose

for a second straight month. Court orders rose by 7.9% in July compared

to the previous month, better than market forecasts of a 3.5% decline.

Like many sectors hit hard by the slowing global economy, beauty and

personal care products appear to be recession proof. Sales in Asia are

expected to top $150 billion by next year and Singapore based LuxAsia is

branching out into online retailing. We asked Patrick Chung about the

challenges. One of the most important challenges

is having the right skills and the right people. In this respect we are

already beginning our transformation to get the right people with the

right skill sets and proven track record, because ultimately I see

speed and execution to be the key for us to be successful in this

market. Which markets are going to drive growth for LuxAsia? Currently

we are in ASEAN and China, but in the next three to five years within

the ASEAN sector we see Indonesia and Thailand and Vietnam as three of

the strong emerging markets that we can really bring a lot of growth in.

In the greater China platform, we see China as a market where with

online capability we can put things in a synergy way and we can get a

lot of growth. And also there's India. India is a market with huge

potential but up until now there's been a lot of hidden potential that

has not been tapped. In India, just like in China, there is a lot of

smaller local players who provide cheaper products, so how will you

compete against these? In all these markets, there are local brands that

serve the local population for different income levels. As we said,

there's a growing influence and the customers normally want to for that.

Different brands to meet different needs. I think again that is the

thing for us as Asia's beauty makeover, we will through online and

off-line, use foreign brands and local brands and we can find a

platform to meet the customer needs. LuxAsia's founder and chairman

Patrick Chung. More than 13,000 Indonesian seaweed farmers have

launched a massive class action in Australia, demanding compensation

for the effects of Australia's worst oil spill in 2009. The company that

operated the rig, a subsidiary of the state owned Thai oil firm,

denies the oil reached Indonesian waters. Rebecca Henschke travelled

the Araldo island in eastern Indonesia to make the farmers. --

promote island. The farmers here say that in

September 2009 something changed -- promote island. TRANSLATION: I had

never seen anything like it. The colour of the water was like a

rainbow. I didn't understand what was going on. When I got to my

seaweed farm, the seaweed too had changed colour and we then saw dead

fish, too many to count. 250 kilometres offshore there had

been a huge explosion at the Montara oil rig. For more than ten weeks,

and of oil to fill ten Olympic sized pools spewed out into the Timor Sea.

Daniel and his wife Victoria save for the next four years the seaweed

they planted died -- said. Lawyers are arguing on their behalf as they

keep plaintiffs in this case they should be awarded 200 million US

dollars or more for the damage done to their seaweed because of the oil

blowout -- say. It is a lot of money but there's a lot of seaweed farmers

and these seaweed farmers for the first time in their existence here,

they had businesses which actually returned as much as $30,000 each for

a big seaweed grower in a year. In the boom years before the spill,

Victoria and Daniel saved enough to be able to send their children to

university, something beyond their dreams and unthinkable a generation

ago. Since the spill, Daniel has worked as a day labourer on a hotel

construction site. The class action is being bankrolled by one of the

largest litigation funders in the world in return for a share of the

compensation if the case is successful. The company that managed

the Montara oil rake declined the BBC request for an interview, but in

a statement they said the Independent scientific research they

have done shows that oil never reached the Indonesian coast or

Indonesian waters and it says that it did no long-term damage to the

sensitive and biodiverse environment here. The company PT TEP Australasia

told the BBC that none of the research or testing they paid for

was done in Indonesian waters or around rotator. They never reached

an agreement with the Indonesian government for a permit. Rebecca

Henschke, BBC News. A quick look at the markets and they

have opened lower following along with Wall Street's queues,

especially the Nikkei and the All Ordinaries. Thanks for watching.

That's it for the programme. to stumble after the 9/11 memorial

ceremony, her doctor says she's been diagnosed with pneumonia

but is recovering well.