27/08/2014 World Business Report

BBC World News. Now for the latest financial news with Alice Baxter and

World Business Report. The case for Scottish independence

'has not been made' say 130 businesses who have written to The

Scotsman newspaper. The Moscow International Automobile

Salon opens as the crisis in Ukraine and slowing growth send car sales

skidding in Russia. Welcome to World Business Report.

I'm Alice Baxter. In a minute why New Zealand dairy giant Fonterra is

investing in a Chinese infant formula company. But first...

300 years of history could end on 18th September when people living in

Scotland will be able to vote on becoming an independent nation, and

split from the United Kingdom. The battle to convince voters, one way

or the other, has been fierce. But over 130 business leaders have now

weighed in with a letter in The Scotsman newspaper. The letter

argues that there the uncertainty that would result from a Yes vote

would be bad for business and bad for Scotland. Our business

correspondent Jonty Bloom reports. So far coming politicians have

dominated the debate over Scottish independence but now 134 executives

representing companies from distilleries to banks have come out

against an Independent Scotland. They have a four main worries, the

relationship between Scotland and the European Union, changes to tax

and regulation, how Scottish exports will be affected and what currency

they will use. The pro` independence campaign claims that a currency

union with the rest of the UK would be the best option but there are

alternatives. We have other options, we could have a more flexible

currency like Sweden. We could have a Scottish pound attached to the

pound sterling. I am seeking a mandate to have the pound sterling

so that we get our wages in the pound. But the three largest UK

parties have all ruled out a currency union with an Independent

Scotland. The question that was asked was, if we don't have the

currency Union, what is Plan B? I had no luck when I asked three weeks

ago and he still cannot say what the answer will be. I want to know what

Plan B is and so do you. Tell us! After accusations that businesses

had real concerns over the feasibility of an Independent

Scotland, voters will now have a better idea of their fears.

The Moscow International Automobile Salon gets into gear today amid high

hopes from western firms that Russia will turn into a lucrative market

for them. One consultancy is predicting that as the economy

develops, Russia will overtake Germany as Europe's biggest car

market within six years. But this year, the show opens in the shadow

of a rift between Russia and the US and Europe over Russia's involvement

in Ukraine. On top of that, Russia's economy is on the slide, a downturn

likely to be accentuated by the sanctions that have been applied to

the country. Earlier this week Russia's top car maker Avtovaz

announced plans to cut production of its Lada cars in the next three

months due to a falling Russian market. So which companies are

turning up to the show and what do they expect to get out of it? Dr

Frank Schauff CEO, of the Association of European Business

joins me now from Moscow. How important is this for the companies

that you represent? Good morning. It is very important as an event and it

takes place every two years. In terms of visitors, it is the largest

event in Russia. But car sales within Russia are on the flight. I

was just saying that Avtovaz has cut production of its Lada because of

that `` slide, isn't that worrying? We certainly see that the car market

is contracting currently. We saw in July that it was down by nearly 23%

in comparison to July last year. We had certainly hoped for a different

development but clearly it is better than the contraction we saw in 2009

and even that which we thought in European markets in the last few

years. Russia is the second largest car market in Europe and it will

stay an important market for the international car industry. But of

course, are you not worried about the shadow of sanctions? Are you

worried that they could hit the car industry? Let's put it this way, at

the moment there is no direct political implications for the car

industry which derived from the Ukrainian crisis. We can see the

effects on the car market which have to do with the an increased exchange

rate with the euro and consumer expectations of the Russian

consumers. There is no direct political implications on the car

market currently. What sort of cars do you think Russian consumers are

interested in? If we look at it at the moment, the middle and lower

segment are suffering but certainly if you look into the structure of

the car market in Russia, the future of every category of car is going to

be interesting to stop what we see currently is that the medium sector

is growing and is stable but that could change in a few months time.

Thank you. Enjoy the show! New Zealand dairy giant Fonterra

says it's forming a partnership with China's Beingmate to help meet

growing demand for infant formula in the world's most populous nation.

Fonterra, the world's largest dairy exporter, said it plans to take a

stake of up to 20% in Beingmate, an infant food company based in

Hangzhou. Rico Hizon is in Singapore... Why have they decided

to do this? For Fonterra, it is about tapping the lucrative Chinese

infant formula market and providing them with high`quality ingredients

from New Zealand. The chief executive said that the alliance is

a game changer and that they would invest a hefty half a billion US

dollars into this partnership. The deal is an aggressive moves and

comes out year after a contamination scare for Fonterra and in 2010, it

wrote off an investment in another Chinese company after its

involvement in an infant formula poisoning crisis. Beingmate will own

50% and Fonterra will provide the facilities and Hebron materials.

Fonterra is forging alliances in mainland China. China is the largest

consumer of milk products exports from New Zealand and Fonterra is

keeping its fingers crossed that this will be a successful

partnership. Thank you. In other news... Mozilla, a company

best known for its Firefox browser, has launched a new low`cost

smartphone in India that will retail for $33 US dollars. The phone is

only for sale on India's online shopping site, Snapdeal. India's

emerging market is regarded as the world's fastest growing for low`cost

smartphones. The Zimbabwean President Robert

Mugabe is on a five day visit to China, seeking more investment in

his country's economy. He was welcomed by his Chinese counterpart

Xi Jinping in Beijing with full military honours. He is seeking

funds to invest in decaying roads, rail and power facilities and to

help mechanise Zimbabwe's agriculture. A look at the markets.

Asian stocks are posting early gains on Wednesday, closing above the 2000

mark for the first time but as we can see in the past few minutes, a

are now slumping `` they. That is the view across the region for this

hour. I will be back in just a moment, so don't go away.

The World Health Organisation has called for regulations to stop

makers of e`cigarette from promoting their product as a way to stop

smoking. Suddenly they are everywhere,