06/07/2017 Asia Business Report


06/07/2017

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Now on BBC News all the latest business news live from Singapore.

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The owner of KFC, Pizza Hut and Taco Bell in China reports of strong

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profits thanks to hungry consumers. And handmade guitars from the

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Philippines. Turning to the Internet to save a vanishing craft. Good

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morning, Asia and hello, world, glad you could join us for this edition

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of Asia Business Report. It has been 30 years since the first KFC

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restaurant opened in China. The company has come a long way and its

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owner reported its latest results and the profit is up by nearly 40%

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other than KFC it also owns Pizza Hut and Taco Bell. There are more

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than 7600 outlets throughout the mainland. Consumers have shown their

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appetite for Western-style fried chicken and pizza. Spinning off its

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China business has certainly paid off. The sceptics were wrong. If you

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look at China there is a yen to spend. Not only do they have a yen

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to spend they also have you won. What we are seeing is that Chinese

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consumers want to spend money. -- yuan to spend. Can this be sustained

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bombing forward with the fast changing tastes of mainland

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consumers? What we saw last night... We have to remember that Yum China

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owns three brands. Taco Bell, Pizza Hut and KFC. I am getting hungry

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now. What we saw that picture and chicken were flat. As a result, what

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happens to Yum China is that all have to do well. Even though the

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profits were good, we saw that sales were flat. So they had to offset the

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weakness of each other. But 7600 stores and counting, this is a huge

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chain in mainland China. Will new branches bring growth or drain the

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cash flow? You could do a little bit of both. 30 years ago they had one

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store. Now they have over 7000. That is in 30 years. They want to 600

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stores this year and that will be quite significant. The problem is

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that they then start to cannibalise their own stores. What we are

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focusing on at the moment are the first tier cities, Shanghai, Beijing

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for example. But when we dropped to the legatees, it becomes a more

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challenging. How about the stigmas of the food scandals from years ago.

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Has that been forgotten? I think it has. Consumers are rolled by ruled

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by their stomach rather than their head. Once they are hungry, they

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will eat. There are occasionally food scares but they have been put

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in the past and they are focusing on the future. Volvo, owned by China's

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company has become the first carmaker to announce it will no

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longer make petrol or diesel only vehicles. From 2019 all of their

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models will be electric or hybrid. He drives up in a 19 oh weight model

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T. The shape has changed a bit over the years but thank goodness when it

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comes to the brown allegro. All these cars have one thing in common,

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an internal combustion engine turning petrol or diesel. We have

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relied on it for a century but is that about to change? Volvo is

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taking a bold step, heralding the end of an era of the pure internal

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combustion engine. From 2019, Volvo says all its new models will be at

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least partly electric. Ambitious plans but experts say it won't be

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quick. Diesel and petrol will have a long live in them yet. People choose

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to adopt hybrids before they go electric. This sums up one of the

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big street -- reasons why electric cars have not been adopted. Often

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you cannot park near your house so how can you charge your electric

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car? Cities are plagued by pollution with diesel engines one of the main

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culprits. Electric cars are quieter and cleaner. They are getting

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cheaper with a better range. It will still be some years before the

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internal combustion engine drives off for good.

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If you like beef and chicken it is likely you have eaten a Brazilian

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product in recent months. The country accounts for almost one

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fifth of all meat exporter in the world. Of this year, local police

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unveiled a bribery scheme where health officials allow tainted meat

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to reach school meals and supermarket shelves. Companies

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involved denied wrong doing the shares plunged by 40%. Can the

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reputation big repaired? -- be repaired? The cattle here roam free

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in the fields. Since Brazil's GBS codes down the local meat processing

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plant, ranches here have no-one to sell me too. TRANSLATION: This is

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not foot and mouth disease. This was caused by corporate corruption. The

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prices have fallen sharply. Farmers like this man are part of an army of

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4 million people who helped to turn Brazil into one of the top meat

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producing nations in the world. Now a scandal involving a leading

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company down here is bringing uncertainty to what was once an very

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profitable business. All those they say food safety was not compromised,

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negative headlines are taking their toll on the meat industry.

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Transocean Mack the Brazilian government needs to act to get the

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message across that much Brazilian mate is safe for consumption and

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defend its reputation. But with the government at war against the

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country's top meat country, that is unlikely to happen any time soon.

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That war now has millions of farmers worried about the future of their

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businesses. A reputation that took decades to establish will take years

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to repair. A city in the Philippines considers itself the guitar country

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of -- centre of the country. They have been given access to new

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markets via the Internet that they face unique challenges.

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When karaoke came, people started singing karaoke instead of the

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guitar. There is a karaoke every 50 metres. We Filipinos, we love to

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seeing. One of the biggest challenges is the factory produced

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guitars. We prioritise quality over quantity.

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We would like to show everyone that there are still Filipino maid

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guitars that are very good quality. Handcrafted guitars are so much

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better in terms of quality. The way we build our guitars is actually

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done by a single luthier, from start to finish. That makes it unique and

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a work of art. No two guitars are alike.

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70% of the guitars and ukuleles are online and the rest are walk-in

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customers. Like before where the clients we get a mostly from the

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Philippines, it is easier for us to showcase our products and our with

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everything online. We have one brand, we ship the item

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without strings. And they slap the Rembrandt on it. There are other

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ones we were gone from start to finish and wish it goes direct to

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the customer. There are less and less people working on this craft.

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The skill is not being passed from one generation to another. Even

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though we can train them, the interest is not there. We hold onto

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our passion of making quality instruments. Let the people

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understand that there are still handcrafted instruments like that.

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Beautifully made handcrafted guitars and ukuleles from the Philippines.

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Before we go, let's have a look at the markets.

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The All Ordinaries is down because petroleum producers have lost steam

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after an eight session winning streak. Thank you for investing your

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time with us. The top stories this hour:

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At the United Nations, the US ambassador has described

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North Korea's intercontinental ballistic missile test as a sharp

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military escalation. Heavy floods caused by unprecedented

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rain have forced almost 400,000

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