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Asian Business Forum

Asian Business Forum. 2 nd Meeting March 28, 2012. “ Foie Gras Rossini ” $16. “ Truffle Porcini Grilled Chicken ” $11.50. U.S. Franchiser. Japanese Franchisee. U.S. Company. Japanese Partner. Joint Venture In Japan ( Wendy’s Japan LLC ).

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Asian Business Forum

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  1. Asian Business Forum 2nd Meeting March 28, 2012

  2. “FoieGras Rossini” $16

  3. “Truffle Porcini Grilled Chicken” $11.50

  4. U.S. Franchiser Japanese Franchisee

  5. U.S. Company JapanesePartner JointVentureInJapan (Wendy’s Japan LLC)

  6. India: Coffee Boom or Bust?News Update • US consumes more than 1 million metric tons of coffee. • Equates to about 9 lbs per person per year. • India consumes about 90 thousand metric tons of coffee. • Equates to about ½ lb per person/ per year . • Grows 3% of Worlds’ coffee needs. • So why all the fuss about Starbucks and Dunkin Donuts in India: • A cup of coffee (interestingly called a latte in India) is Rs 250.00 / $5.00. • 40% of India’s population is under 30 (CIA Data/Zacks Equity Research). • Which is about 500 Million, equates to a potential of $2.5B if they drink one cup/year. • SBUX will open 50 store by the end 2012 and DNKN 500 in 15 years. • Target growth for same store sales : 10-15% YOY. • Expected profit in 2013 for SBUX and DNKN approx$300M. • BTW, US does not grow any Coffee!, yet we are the 3rd Largest consumer.

  7. 2nd Asia Business Forum INDONESIA: STATE OF THE AVIATION INDUSTRY Anita Sulaiman, Country Adviser – Singapore & Indonesia

  8. Geography & demographics ideal for air transport • 17,508 resource-rich islands spread over 5,000 km spanning 3 time zones: Aviation critical link • Size: 2 million sq. km (736,000 sq. miles); about 3x Texas • Lack of reliable alternatives: Poor road & rail infrastructure, dangerous seas to move people & goods • Huge land & sea mass: Need to build defense capability • Poverty improvement master plan (MP3KI: 2011 - 2025) targeted at 60 million (24% of population) • = good news for booming market • Economic expansion (MP3E: 2011 – 2025) • = fast growing middle class • Annual GDP growth of 6.3% – 6.7% next 3 years * World’s largest archipelago * World’s 4th most populous nation - 240 million people

  9. Indonesians stole limelight at Singapore Air Show • Largest contract in commercial aviation & Boeing history • Lion Air order of 230 Boeing 737 airplanes worth $22.4 billion • Option for 150 more aircraft ($14 billion): Total value of $36 billion • Their Wings Air bought 27 ATR 72-600 planes worth $610 million: World’s largest ATR operator. • PT DI contract with Airbus Military: 9 C295 for Indonesian Air Force. • + 3 more for police air wing expected. • C295 program includes substantial collaboration/technology transfer • Jakarta’s CKG became SE Asia’s busiest airport • 43.7 million passengers in 2010, 18% average yearly growth • To expand capacity: 60 million by 2016. • Garuda “Best International Airline”: January 2012. • Roy Morgan Customer Satisfaction Award includes 4-Star Skytrax rating • 2010: World’s Most Improved Airline Award (Survey of > 200 airlines) • Carriers respond to huge potential: Competition increasing • Tiger-backed Mandala • Pacific Royale launch • Airlines eye share sales: IAA, Garuda, Merpati, Lion Air • Garuda expecting 20% revenue growth in 2012 • 2011: Highest growthof 39%, net profit growth of 60% • IATA’s 2012 global profit margin forecast: 0.6% Country highlights & overview

  10. Challenges to growth

  11. Industry soaring amid optimism

  12. Thank you | Terima kasih Anita Sulaiman anitasulaiman@aol.com

  13. RECENT CHINA DEVELOPMENTS David McHardy Reid PhD Professor of Global Business Strategy Albers School of Business and Economics Seattle University

  14. CHINA SLOWING? • Recent anniversary of Shanghai Surprise • Equities volatility index doubled • Stocks exposed to China have been doing worse than others • Exports declining

  15. EXPORTS DECLINING

  16. HARD LANDING? • Much worry about China’s ability to manage an economic “soft landing” • Economy heavily dependent on fixed investment

  17. WHY IS THIS SIGNIFICANT?

  18. CHINA SLOWING? • Seen significant decline in investment in roads and construction • Structural reasons for this • Local governments (LGs) main agents for this kind of activity • LGs suffered sharp decline in revenue

  19. LOCAL GOVERNMENT STARVING?

  20. REAL ESTATE ANOREXIA?

  21. INVESTMENT SLOW DOWN • Much less likely to invest than before • Land sales declined • Growth rates declining by 40 to 70 percent • 70 percent decline in land sales

  22. INVESTMENT SLOW DOWN • Property companies buying less because they intend to build less • Land sales 30 percent of LG revenues • Now China showing 15 percent yoy growth of fixed asset investment (2012) • 23.8 percent (2011)

  23. GROWTH SLOW DOWN • Not talking of crash yet • Beijing knows there is a problem • Likely to see loosening of restrictions on property • Stimulus for consumer demand • Lessening of bank required reserve ratios • Chongqing model Vs Hu-Wenbao model

  24. Asian Business Forum 2nd Meeting March 28, 2012

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