23/01/2017 BBC Business Live


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23/01/2017

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This is Business Live from BBC News with Sally Bundock

:00:00.:00:00.

Samsung confirms the Note 7 smartphone disaster was caused

:00:07.:00:13.

The overheating devices have cost it more than $5 billion and huge

:00:14.:00:18.

Live from London, that's our top story on Monday the 23rd of January.

:00:19.:00:41.

The world's biggest smartphone maker also says its next big phone launch

:00:42.:00:44.

We'll ask how long the damage will last.

:00:45.:00:57.

Also in the programme: The boss of Taiwan's Foxconn -

:00:58.:01:01.

which is based in Taiwan - confirms he's considering

:01:02.:01:03.

a multibillion dollar factory investment in Donald Trump's

:01:04.:01:05.

And all of the key markets are down by nearly 1%. Why such a bad start

:01:06.:01:21.

to the trading week? We talk you through the winners and losers.

:01:22.:01:22.

And we'll be getting the inside track on baby food.

:01:23.:01:24.

It's a huge market worth $53 billion.

:01:25.:01:27.

And we're speaking to the mum who couldn't find

:01:28.:01:32.

what she wanted in the shops, so she started her own organic business.

:01:33.:01:35.

And we want to hear from you today - do you still trust Samsung?

:01:36.:01:38.

The start of a new business week. Do get in touch, whether it is about

:01:39.:02:10.

Samsung, baby food or any the other stories. Let's start in South Korea.

:02:11.:02:11.

Korean electronics giant Samsung has released the results

:02:12.:02:13.

of its investigation into its flagship Galaxy

:02:14.:02:15.

In October last year the phones were recalled because some had

:02:16.:02:22.

The pictures were all over social media.

:02:23.:02:32.

The company today confirmed problems with the design,

:02:33.:02:33.

saying the manufacturing of batteries was to blame -

:02:34.:02:36.

The Note 7 was supposed to rival Apple's iPhone 7, but instead,

:02:37.:02:40.

the device caused massive damage to the company's

:02:41.:02:42.

Last year, more than 100 of the phones spontaneously

:02:43.:02:48.

This forced Samsung to halt production and recall millions

:02:49.:02:54.

globally, months before the all important

:02:55.:02:57.

The debacle almost entirely wiped out the company's mobile business

:02:58.:03:03.

profit in the third quarter of last year - which is one

:03:04.:03:07.

And this dragged total profits at the company down by 30%,

:03:08.:03:15.

Samsung itself predicted another $3 billion could be wiped off

:03:16.:03:23.

The total cost of the recall has been estimated at around

:03:24.:03:30.

$5.3billion, but the damage to the company's brand

:03:31.:03:34.

Gareth Beavis, Mobile Editor of the website

:03:35.:03:45.

Gareth, I saw this confirmation this morning and said, really, you've got

:03:46.:04:03.

to be kidding us? Of course it was the battery. How important is this

:04:04.:04:09.

confirmation? Does it draw a line? We really drew a line when Samsung

:04:10.:04:13.

withdrew the phone and said, we can't buy it any more. To draw a

:04:14.:04:19.

line and say, we got that problem under control, we don't need to

:04:20.:04:27.

worry. The new phone is the S8. Apparently it is delayed a little

:04:28.:04:31.

bit. I think it was going to be feathery. I think it might be much

:04:32.:04:37.

now. Is this Samsung just taking its time to make sure they get this spot

:04:38.:04:42.

on? The chances of a phone having the production issues Samsung have

:04:43.:04:48.

had a pretty into Tessa Munt. Usually they happen in February. --

:04:49.:04:56.

into Tessa Munt. They could say, everything is fine.

:04:57.:05:08.

They are putting more health checks on top of it. Everybody is trying to

:05:09.:05:12.

assess how damaging this will be for some song. Will smartphone users be

:05:13.:05:16.

loyal? Wildie stick with this company despite the fact they had to

:05:17.:05:23.

send back the Note 7? People are still wary. It will always have a

:05:24.:05:29.

halo effect. People are still a little bit fickle. If the S8 is a

:05:30.:05:36.

success, it will soon forget. People don't want to miss out on having a

:05:37.:05:41.

good phone for a good price. Presumably Samsung will have to

:05:42.:05:45.

spend a lot of modern -- money on marketing? They have to convince us

:05:46.:05:48.

that things are OK again. Absolutely. They already spend money

:05:49.:05:55.

on marketing. You will see a subtle change in marketing. You will see

:05:56.:05:58.

things about safety around the help of the products. Make sure everybody

:05:59.:06:02.

understands this is a solid and stable product. Thank you for coming

:06:03.:06:07.

in. We have already got some tweets. We will do them later. It's a bit of

:06:08.:06:15.

a mixed bag. Stop giving me your scripts! The other stories making

:06:16.:06:19.

headlines around the world. Opec and other oil producing

:06:20.:06:20.

countries have agreed a way to monitor that all parties stick

:06:21.:06:23.

to the historic supply The countries have already cut oil

:06:24.:06:25.

supply by 1.5 million barrels a day. The deal came after two

:06:26.:06:29.

years of oversupply led Saudi Basic industries have agreed

:06:30.:06:50.

to die -- to buy Royal Dutch Shell's stake. The Middle East's biggest

:06:51.:06:57.

petrochemical bridges and shell are ending their partnership earlier

:06:58.:07:00.

than planned, it was supposed to be in 2020. In 2018, Shell ended plans

:07:01.:07:10.

to build a plant in Qatar. Last year they entered and natural gas

:07:11.:07:13.

adventure in Abu Dhabi. US President Donald Trump has

:07:14.:07:15.

said that he will soon begin renegotiating

:07:16.:07:17.

the North American Free Trade Agreement with his Canadian

:07:18.:07:19.

and Mexican counterparts. Meetings have been scheduled

:07:20.:07:21.

with Canadian Prime Minister Justin Trudeau

:07:22.:07:22.

and Mexican President Enrique The Nafta agreement came into effect

:07:23.:07:25.

between the three countries in 1994. Mr Trump has called it the worst

:07:26.:07:28.

trade deal the US has ever signed. I have to say, he is all over this

:07:29.:07:48.

next story. He is everywhere. He is the gift

:07:49.:07:50.

that keeps on giving. The Taiwan-based company that puts

:07:51.:07:52.

Apple's phones together - mainly in Chinese factories -

:07:53.:07:54.

suggested it will invest as much as $7 billion in new manufacturing

:07:55.:07:57.

plants in the United States. The comments from Foxconn's Chief

:07:58.:08:07.

Executive Terry Gou are likely to be welcome by new US president

:08:08.:08:15.

Donald Trump who has warned of tariffs to help encourage

:08:16.:08:17.

manufacturing jobs We both think this is an amazing

:08:18.:08:36.

story. A Taiwanese company actually going to go to the United States and

:08:37.:08:42.

build a plant. Good news for Trump. Aren't there are rumours that this

:08:43.:08:48.

is Apple who pay the money? I will get to do is paying in a second. If

:08:49.:08:52.

this plant does materialise for the US. It would be a major -ish --

:08:53.:08:57.

victory for Donald Trump, who has pledged to bring black -- back all

:08:58.:09:05.

of the jobs lost to Asia, back home. Fox con is the biggest electronics

:09:06.:09:15.

maker. This plant in the US will make display panels, which is

:09:16.:09:18.

critical to these smartphone and iPad devices. It's said this move

:09:19.:09:27.

could create between 30000 and 50,000 jobs in the United States.

:09:28.:09:34.

That is a very large number. Pennsylvania is the current

:09:35.:09:36.

frontrunner as a location of this new plant. But they are also in

:09:37.:09:43.

discussions with other states. As we have been reporting, Donald Trump

:09:44.:09:49.

has been agitating against China and fox con is one of China's biggest

:09:50.:09:54.

employers. This would be a major move, obviously. It is interesting,

:09:55.:10:00.

the comments about how many jobs could be created. The large -- the

:10:01.:10:04.

last time we saw footage of a factory in China there was hardly a

:10:05.:10:08.

person to be seen. It was machines, it was automation making the stuff.

:10:09.:10:15.

That's right. This plant they are considering, they built sitting

:10:16.:10:21.

conjunction with... Apple has not actually commented on the report. It

:10:22.:10:25.

does have a very big interest in them building a plant in America,

:10:26.:10:31.

because about half of fox con's revenue comes from Apple. As to who

:10:32.:10:35.

much -- who puts how much money in, we will have to wait and see. Fox

:10:36.:10:41.

con have said before they plan to replace most every human work a

:10:42.:10:51.

robot. We're still quite a long way away from having fully automated

:10:52.:10:55.

factories. I don't think it would be an immediate thing. Thank you. Lots

:10:56.:11:01.

of detail. Let's have a look at how markets fared generally today in

:11:02.:11:06.

Asia. The start of a new week. That is Friday's close for the US

:11:07.:11:11.

markets. Friday was about the inauguration of Donald Trump. That

:11:12.:11:15.

dominated completely. Today, quite a fall from the Nikkei index. The

:11:16.:11:23.

dollar is down against most major currencies. There is a real

:11:24.:11:30.

deflation now that he is in the job. Some deflation perhaps felt on

:11:31.:11:34.

markets. Let's look at Europe and how it is going today. Let's move

:11:35.:11:43.

onto the next screen. We can't. Just to say, when I looked at them

:11:44.:11:48.

early... We have got them behind me now. They are down by around about

:11:49.:11:55.

1%. Why are we seeing falls in Europe? Aaron has someone who can

:11:56.:11:56.

give us and insight. Joining us is Kathleen Brooks,

:11:57.:11:59.

research director for City Index. This is markets waning a little bit,

:12:00.:12:16.

kind of going... Give us some details. Walk the walk. From

:12:17.:12:23.

election day to Inauguration Day there has been a biggest -- the

:12:24.:12:28.

biggest rally in the US stock markets since any president. It is

:12:29.:12:33.

normal to have a ball back at this stage. The rally can't continue? It

:12:34.:12:42.

can't. Stock markets are at a record high in the US. They are looking

:12:43.:12:47.

very expensive. Can he continue the rally in the next four years? Not

:12:48.:12:53.

sure. Nor the markets are reacting how they are at the moment. He is

:12:54.:12:56.

talking lots but not about stuff that is going to boost the economy.

:12:57.:13:00.

It is about moving an embassy from Tel Aviv to Jerusalem, criticising

:13:01.:13:05.

the press etc. Interesting that we are getting this news about fox con.

:13:06.:13:12.

We are seeing American car-makers saying about production in the

:13:13.:13:16.

United States. I think that is going to be a real positive, if we see

:13:17.:13:20.

more production onshore rather than reversing the tide of the offshore

:13:21.:13:24.

production. I think we've also got to remember that Trump hasn't been

:13:25.:13:27.

universally good for stock markets. There are some con -- companies,

:13:28.:13:34.

Boeing, for example, one rogue tweet can knock billions off their share

:13:35.:13:38.

price. Markets liked what he was saying but now is the time frame to

:13:39.:13:43.

deliver the Russia -- the Russian executive orders we have seen at the

:13:44.:13:47.

weekend... If we don't see the rollback of financial regulation,

:13:48.:13:52.

that could be a problem. Swiftly switching, I want to talk about the

:13:53.:13:56.

worst performing currency and the world, the Turkish lira. They are

:13:57.:14:05.

expected to raise interest rates, which is interesting. They have had

:14:06.:14:09.

a lot of pressure from President erred again to cut interest rates to

:14:10.:14:16.

boost the economy. However, the currency, it has really taken a

:14:17.:14:18.

bashing in the last few months since the two last year. They need to hike

:14:19.:14:23.

interest rates to stem that that line. We will see whether or not an

:14:24.:14:29.

increase in the benchmark rate is expected. They will have to do more

:14:30.:14:34.

than that. Here is an economy that has been hammered. You talk about

:14:35.:14:37.

the coup, the terrorist bombs, dropping tourism... Absolutely. This

:14:38.:14:43.

is just boosting inflation, the fall in the year as well. Thank you for

:14:44.:14:45.

coming in. It's estimated to be

:14:46.:14:45.

worth over $50 billion. We get the inside track

:14:46.:14:50.

on the global baby food You're with Business

:14:51.:14:53.

Live from BBC News. The Prime Minister will today unveil

:14:54.:15:03.

the Government's vision of a more interventionist,

:15:04.:15:08.

industrial strategy for Britain. Theresa May will launch

:15:09.:15:13.

the plans at her first regional Cabinet meeting

:15:14.:15:15.

which is happening in Ben Thompson is at a fuel processing

:15:16.:15:17.

plant in Warrington to see what this So it depends on what she says

:15:18.:15:31.

business though, Ben, hoping it is all good stuff obviously? Yes, good

:15:32.:15:37.

morning to you both. Welcome to Warrington and it does depend who

:15:38.:15:40.

you speak to because we have been speaking to business all morning and

:15:41.:15:44.

some saying help for business very welcome, but others saying

:15:45.:15:51.

Government just leave it to us. We can cope without much intervention.

:15:52.:15:55.

We are at this oil processing plant. It comes in as this so-called base

:15:56.:16:01.

oil and this is how it ends up. This is the finished product. You will

:16:02.:16:07.

probably be used to stuff like this on the shelf. This place is

:16:08.:16:13.

interesting because it really tells a story about what we will hear from

:16:14.:16:17.

Theresa May later, because it is not just about investing in hard

:16:18.:16:20.

infrastructure, roads and railways and internet connections, but in

:16:21.:16:23.

research and development. If you take a look at this, this is a

:16:24.:16:31.

brand-new ?3 million head office, upstairs will be the offices, but

:16:32.:16:35.

downstairs is the big research and development labs where they will

:16:36.:16:38.

come up with new and more efficient ways of doing what they do here,

:16:39.:16:41.

that's what will be important. As you can see behind me, the truck

:16:42.:16:45.

there, that's also important because without spending on infrastructure

:16:46.:16:48.

and the roads and the railways well frankly those trucks won't be able

:16:49.:16:52.

to get around. So what we'll hear from Theresa May slaer this

:16:53.:16:57.

ten-point plan. It is a ten-point plan to get business working again

:16:58.:17:02.

and the Prime Minister says she wants all people wherever they live

:17:03.:17:06.

in the country, from all corners of the country to feel the benefits of

:17:07.:17:09.

economic growth. She will layout the plan later and it includes support

:17:10.:17:13.

for local business groups, support for research and development and

:17:14.:17:16.

training, but crucially, also for that so-called hard infrastructure,

:17:17.:17:20.

the roads and the railways and the internet connections. So we will

:17:21.:17:26.

hear from here. Her. There will be full coverage on BBC News. Thank you

:17:27.:17:29.

very much indeed, Ben Thompson up north for us today.

:17:30.:17:39.

He is at an oil and lubricant factory.

:17:40.:17:43.

The world's biggest smartphone maker Samsung confirm

:17:44.:17:50.

faulty batteries were to blame for the Note 7 burning

:17:51.:17:52.

The South Korean firm also says its next big smart phone

:17:53.:18:01.

A quick look at how markets are faring.

:18:02.:18:27.

Now, the global market for baby food has become big business in recent

:18:28.:18:31.

years and our next guest, Cat Gazzoli founded her company

:18:32.:18:36.

Piccolo two years ago hoping to get in on the action.

:18:37.:18:39.

Baby food accounted for over $53 billion around the world in 2015.

:18:40.:18:42.

Better income levels, rising awareness about the benefits

:18:43.:18:44.

of organic products, means the natural food segment

:18:45.:18:46.

is gaining popularity, growing at 12% a year.

:18:47.:18:56.

Start-up Piccolo launched in April last year, and has

:18:57.:18:59.

already seen its first year sales targets five-fold.

:19:00.:19:01.

The company focuses on food made from the so-called Mediterranean

:19:02.:19:04.

diet involving high consumption of olive oil, fruits and vegetables

:19:05.:19:07.

Cat Gazzoli, founder and CEO of Piccolo.

:19:08.:19:15.

Cat is with us. Great to have you with us Cat and you have some of the

:19:16.:19:23.

satchels here. Are you going to try them? Maybe. I challenge you to try

:19:24.:19:29.

the baby food. There is one I want to try, spaghetti or something. You

:19:30.:19:35.

went out to buy food and you go, "I don't like what's available." So you

:19:36.:19:39.

start your own company? Even before that because I was working with the

:19:40.:19:46.

NCT. That's? The national childbirth, the largest charity

:19:47.:19:50.

supporting parents in the UK in their first 1,000 days. All those

:19:51.:19:54.

years I was saying to British parents what they were missing in

:19:55.:20:01.

the market and lot of that involved 100% vegetable brands which Piccolo

:20:02.:20:05.

launched and moving up the category so they had the special blends.

:20:06.:20:09.

You're a mum, you thought there was plenty of this stuff? There is

:20:10.:20:16.

loads. You said you worked in this industry for many, many years,

:20:17.:20:20.

before you became a parent, you are Italian and you lived in the UK and

:20:21.:20:24.

the US, but what you're trying to bring through with this food that's

:20:25.:20:28.

different is the fact that there is more veg in it, it has got the

:20:29.:20:33.

Mediterranean touch? Proteins, really coming through, the

:20:34.:20:37.

Mediterranean approach to eating. As Aaron says, it is a really, really

:20:38.:20:41.

busy market. All my boys have grown-up. They are beyond this food,

:20:42.:20:46.

but I remember when they were small and I would go to the supermarket

:20:47.:20:49.

shelf, have you tried it... No. There is loads of different types of

:20:50.:20:54.

food and many told me they are organic and home-made and it is

:20:55.:20:57.

fresh produce and all perfect for your child and there is so much

:20:58.:21:00.

pressure on you to pick the right thing. What we were hearing from

:21:01.:21:06.

parents first of all to get more of interesting, innovative blends. One

:21:07.:21:12.

of our top sellers is mango kale in Asda and in Waitrose we are selling

:21:13.:21:18.

really well our vegetable blends. 100% leek, pea, courgette with a

:21:19.:21:23.

hint of olive oil so really pushing up the style and the flavour blends

:21:24.:21:28.

that are offered on shelf. You need money obviously for a start-up?

:21:29.:21:33.

That's true. Where did you go? Luckily just from my background

:21:34.:21:38.

working in food education I knew a lot of fantastic investors who

:21:39.:21:42.

believe in healthy food and lifestyle type of brands as well as

:21:43.:21:45.

we looked for a fantastic women angels and we have two female

:21:46.:21:52.

investors so those two women have brought so much to our business.

:21:53.:21:58.

OK. We're out of time. You say goodbye and I will have a little...

:21:59.:22:04.

He's trying it. That's good. You're going to have a baby now? I

:22:05.:22:09.

need more than this to have a baby, I'm sorry.

:22:10.:22:15.

Cat, thank you. Good luck with Piccolo.

:22:16.:22:23.

In a moment we will go through the business pages with Dominic.

:22:24.:22:29.

The Business Live page is where you can stay

:22:30.:22:31.

ahead with all the day's breaking business news.

:22:32.:22:33.

We'll keep you up-to-date with all the latest details

:22:34.:22:35.

with insight and analysis from the BBC's team of editors

:22:36.:22:38.

around the world and we want to hear from you too.

:22:39.:22:40.

Get involved on the BBC Business Live web page.

:22:41.:22:42.

On Twitter we're at BBC business and you can find us on Facebook.

:22:43.:22:46.

Business Live, on TV and online, whenever you need to know.

:22:47.:23:01.

You have been getting in touch about Samsung. We asked are you loyal to

:23:02.:23:09.

Samsung and will you stick with the company? Mark says, "It is OK to

:23:10.:23:15.

blame the battery, but they approved its release. How good is its testing

:23:16.:23:22.

and quality control." Another viewer says they are staying on board.

:23:23.:23:28.

Another viewer says twice burnt, no thanks.

:23:29.:23:31.

The BBC's Dominic O'Connell is with us.

:23:32.:23:35.

The Telegraph Theresa May is going to be the first world leader... To

:23:36.:23:42.

meet Donald Trump. She is pinning her hopes on getting an early trade

:23:43.:23:47.

deal. We can't do a trade deal yet. We can talk about it. Two years

:23:48.:23:51.

before we can do something. The Americans are good at extracting

:23:52.:23:57.

good deals if we are an eager buyer. You remember when we did the open

:23:58.:24:01.

skies deal, it was always on their terms. There was something mentioned

:24:02.:24:05.

about jobs. This deal, possible deal, could mean UK and the US

:24:06.:24:11.

people easily travelling back and forth and living? You maybe have an

:24:12.:24:16.

open border and that's a long way. Trump has talked about American jobs

:24:17.:24:23.

and buy American and not UK. I don't know if we will get the open border

:24:24.:24:28.

with the US. That would be quite something. Theresa May is flying to

:24:29.:24:35.

Washington on Friday. Let's talk about the super tower buildings. Two

:24:36.:24:41.

giant masts will be built near Dover. Why? Because it is all about

:24:42.:24:50.

high frequency trading. It takes six 1,000ths of a second for a microwave

:24:51.:24:54.

signal to travel from London to Frankfurt. That's too slow. This

:24:55.:25:01.

mast will shave two or three milliseconds off that. That's

:25:02.:25:07.

incredible. People have the image of the Stock Exchange of men in red

:25:08.:25:11.

braces. That's no longer what the markets are. 40% of the trading in

:25:12.:25:17.

the London Stock Exchange has less than other markets. It is high

:25:18.:25:21.

frequency trading. There is no human contact. We are building masts on

:25:22.:25:26.

the coast of England pre-Brexit and we are hoping this will keep people

:25:27.:25:30.

in London. The villagers are not happy, are they? It is up for a

:25:31.:25:35.

planning application and the villagers may turn it down. You were

:25:36.:25:41.

in Davos, did you meet him? I didn't meet the robot, no.

:25:42.:25:46.

I bet the robot was a cracker. Dominic, short and sweet, we've got

:25:47.:25:51.

to wrap it up, thank you, mate. Thank you for your company too. We

:25:52.:25:56.

will see you tomorrow. Hello there. It's a very quiet

:25:57.:26:10.

weather story across the country at the moment, but at this time of year

:26:11.:26:14.

that can have its own set of problems. Fog was an issue first

:26:15.:26:16.

thing

:26:17.:26:18.