21/08/2014 Asia Business Report

container into a Britt Cox in Essex on Saturday. `` Tilbury docks. Now

time for all the latest business news from Singapore.

The world's biggest listed winemaker posts a 20% fall in profits. And

Panasonic is an electronics giant that is branching out in unexpected

ways. Welcome to Asia Business Report. The

world's biggest listed winemaker and producer of the Treasury wine estate

has posted a loss of $100 million, a 20% year`on`year drop. The

Australian company is much sought after by two private equity groups.

But it has been struggling in some markets.

Treasury wine estates is behind Australia's most recognised

winemaker, as well as several other well`known brands. It is much in

demand. A private equity group is bidding, and so is another unnamed

investment house. They have offered over $3 billion. That is in spite of

a turbulent year. Increased competition in its home market in

Australia is just one challenge. It has also been hit by the

government's austerity measures in China. The company last year said it

expected sales to triple to 500 million cases per year by 2023. But

the government's anticorruption drive has slowed demand for

high`priced wines. The company is also having tough times and the US.

Last year it was forced to destroy tens of millions of wine that it

could not sell. That is not stopping private equity firms putting the

business in their sights. But the interest is conditional and are

still needs to undergo due diligence. For its part, the

management has been trying to discern the company around. I spoke

with a market strategist at IG markets in Melbourne to ask him for

his take on the firm's results. They are probably slightly

disappointing. There was an expected loss that came in at $100 million.

If we look at the underlying number, $12 million profit. It was

slightly disappointing. It is coming out at the Australian arm. And also

Asia. They have seen significant slowdown. How will the disappointing

numbers impact the bidding war? An interesting question. I would assume

that this would take the heat out of any bidding wars. The Asian arm has

probably called by $11 million. That suggests the offer would be fair

value. We are seeing a bit of a hit that could increase out of it. We

will have to wait and see what happens. Briefly, what about

China's policies on extravagance? Has this impacted the results? It's

partly has, there is no doubt there has been a slowdown in cases. There

is also a really sharp decline in sales at the back end of the

financial year. In other business news,

Hewlett`Packard has beaten expectations to post a 1% rise in

its third quarter revenue to $27.6 billion. It has been undergoing a

global restructuring amid slower demand for its desktop computers.

The chief executive said her confidence in the turnaround was

strong. The taxi hire a service Uber has

launched a grocery delivery service in the United States. This is the

red smartphone application. It covers more than 100 items. The

products are competitively priced. It is an experiment and available

only in America for the moment. While millions of people and their

products, this is not a household name.

But they are being watched by Asia and the US. It supplies many of the

toys, clothes and other goods for places like Walmart and target. The

results will not only show how it is performing, but they will be a guide

to the health of American retailers. When they are doing well, they order

more. I asked what we should expect from the company's results. We might

be surprised. Most people do not think this will

have been the best six months. Analysts are expecting very modest

growth. An operating profit of 1%. Even a decline. That is due to a

variety of factors. America saw unseasonably cold weather in the

first few months of the year. That could put off shoppers. We have also

had a number of high`profile ante Chinese protests in factories in

Vietnam. Those factors delayed shipments to America. That is

expected to turn out in the earnings results. Traditionally the second

half of the year is much stronger for retailers. Companies that source

for them. We have to see how they get on in the coming months. For

example, the back`to`school season. People tend to shop and much more.

And also Christmas and the holiday season. We will be getting an

indication from them of how they are doing in the second half of the

year. For the first time, they will not be able to count on

contributions from their brand management unit. That unit was sent

off to a second business on the Hong Kong stock exchange. That

contributes quite a lot to the bottomline. We will have to see.

You might think of Panasonic as an electronics giant. It began. Try

purchased `` vegetable farmer. It has branched out into everything

from smartphones the cameras and is now growing letters

Singapore. It is not a television or a DVD

player. In fact, there is not an electrical wire inside. It is a

lettuce. A premium Japanese variety. It was grown by Panasonic. This is

Singapore's first licensed indoor vegetable farm. Everything is

carefully controlled. There are no pesticides in the

special lamps to simulate the rays of the sun. And there is one other

thing. They are played special music to help them grow. You need to put

the mask and her net on. Every plant, we treat them like

children. Like babies. There is a lot of tender, loving care. For the

manager, this is a labour of love. Factory grows three different

varieties of vegetables right now, with the aim of expanding to 30. It

would so much tender loving care, there is a pricetag to match. How

affordable and sustainable is this type of farming? We are targeting to

premium crops. It is affordable. If you are in the

premium range? That is right. Can you see a day when this is not

for premium crops? We do not want to for premium crops? We do not want to

90% of the vegetables eaten in Singapore are imported. The aim is

make money. Panasonic sees big potential in agriculture. Points to

growing populations and increasing concerns over food safety and

quality. They are starting small but thinking big. We will start in

Singapore. In the future, we want to expand to other countries in Asia,

such as Vietnam, Thailand and Indonesia. Panasonic is expert at

automated factory systems. And it is those skills the company is

transferring to vegetables. Perhaps one day the brand will be as

synonymous as radishes as it is with TVs.

Before we go, a quick look at the markets. Most originals are in

positive territorial. After investors were given reason to

believe the central bank is in no rush to raise the cost of borrowing.

Thank you for investing your time with us. Goodbye for now.

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