S e p t e m b e r 2 0 1 0 • V o l 25 • N o 8 • HK D30
In This Issue
The Cost of Doing Business in China
Intellectual Property Rights PAGE
7
Trust Planning
PAGE
8
Captains of Industry
By Deanna Wong, Hogan Lovells
12
PAGE COOL Captains
For many companies planning to move operations or develop business in China, or those which are already there, protection and enforcement of intellectual property rights (“IPR”) have always been a major concern - sometimes bigger than you can imagine!
In
16
PAGE Tsavorite
The problems with IPR protection in China, in
simply counterfeiting or pirating. Amongst
G2000 v. 2000 Original brand owner sued for infringing hijack marks
the many problems, one of them is the
Trademarks should be registered as early as
hijackng of the IP rights of others. There are
possible with a broad coverage. No one is
particular in relation to overseas IPR holders, are deeply rooted and have gone beyond
numerous reported cases of entities hijacking
immune. One of the cases most familiar to
others’ IPRs as their own and then suing the
Hong Kong may be the G2000 case which
original IP owners for damages, raiding their
was decided in 2007. We mention this
goods/premises and causing havoc to their
here as it is a well recognised local brand.
the 2010 annual ‘Special 301’
operations. As local companies become
G2000 is a Hong Kong brand founded in
Report issued by the United States
more sophisticated in their R&D development
1985. It achieved remarkable sales and
Tr a d e R e p re s e n t a t i v e s ( U S T R ) , w h i c h
and become aware of the legal system, IPR
market recognition in China. The brand
reviews IPR protection and enforcement
disputes have also been increasingly used as
holder registered the G2000 trademark
w o r l d w i d e , C h i n a re m a i n s t o p o n t h e
important leverage by Chinese companies who
in China covering clothes, headgear and
“Priority Watch List” for markets considered
compete with major global brands.
f o o t w e a r. I t d i d n o t g e t p ro t e c t i o n f o r other types of clothing accessories, such
as not providing an adequate level of IPR
Plus • Environment • News • Events
protection, followed by Russia, Algeria,
Here are some of the cases to showcase
as socks, neckties, scarves and belts,
Argentina, Canada, etc.
some of the issues at play.
which are regarded as different to clothes, (Continued on page 2)
www.britcham.com
COVER STORY (Continued from cover)
headgear or footwear under the Chinese trademark registration system. Subsequently, a businessman (‘the trademark hijacker’) obtained a hand-written registration for the trademark of ‘2000’, covering clothes and full range of clothing accessories. This in turn meant if G2000 used their name for these products, it would be at risk of infringing the rights of the Hangzhou businessman. G2000 tried to overturn the ‘2000’ trademark but failed. The matter then escalated and the trade mark hijacker decided to sue G2000 for infringing its ‘2000’ trademark on clothing accessories. G2000 was ordered by the Hangzhou court to pay RMB 20 million (USD 2.9 million), a record for the highest payout for damages in a trademark infringement case in China at the time. The case was decided in 2007. G2000 appealed but the status of the case is not publically available.
Ferrero Rocher v. Tresor Dore Loss of Chinese language trademark due to non-registration Some foreign brand owners do not think of a Chinese brand name when they enter the Greater China market. However, if you do not consider and look after your Chinese brand from the beginning, you will often find that someone else will register and hijack your Chinese trade mark. The Italian chocolate brand Ferrero Rocher entered the Chinese market in 1984, but it did not register its Chinese name ‘Jin-sha’ (Chinese characters: ‘金莎’). The Chinese name was not a direct translation or transliteration, but was well-recognized in China and other Chinese language markets such as Hong Kong and Taiwan. This Chinese trademark was registered by a hijacker and then assigned to a local company, which started to market and sell chocolates under the names ‘金莎’ and ‘Tresor Dore’ with highly similar packaging. The local Chinese company’s products became better recognised than Ferrero Rocher. Ferrero Rocher sued Tresor Dore and the case was taken to the Supreme Court, which held in favor of Ferrero Rocher that Tresor Dore was infringing to Ferrero’s unique packaging and trade dress. However, Ferrero was eventually not recognized as the owner of the Chinese trademark for ‘金莎’ and Ferrero’s use of the Chinese ‘金莎’ trademark in Hong Kong and Taiwan was given little weight in the China proceedings. Commercially, Ferrero only managed to stop them from using the similar packaging but never managed to recover its Chinese trademark completely.
largest corporations in the power and electric industry. The case was recently appealed and settled. However, this shows when things go bad in China, the sums in question are no longer low.
Danone v. Wahaha Be cautious with the potential IPR in business deals
The most controversial issue in the earlier judgment was the amount of damages. The
Danone, the global food and nutrition brand, entered into a joint venture with the
sales of infringing products and awarded all the profit of the “infringing” products as
Chinese brand Wahaha in 1996. Danone eventually held a 51% stake of the joint
damages. This decision was widely criticized as ignoring the different factors that contribute
venture. On the other hand, Wahaha agreed to assign its brand to the joint venture at
to a product’s profit including various other technologies, patents, Schneider’s trademark
RMB 100 million. The assignment was eventually refused by the Chinese Trademark
and goodwill. This case was appealed to the Zhejiang Higher Court, and was settled at
Office on the basis that Wahaha was a state-owned brand which its holding enterprise
RMB157 million (US$23 million). There were numerous cases ongoing internationally which
does not have right to sell. Danone and Wahaha then entered into an exclusive licensing
were also settled.
Wenzhou Court generally took CHINT’s calculations based on the overall profit rate and
agreement, providing that Wahaha did not use the trademark for any independent business activities or allow it to be used by any other entity. Wahaha set up a few independent business entities which manufactured products under the Wahaha trademark. A huge international legal battle ensued regarding the ownership of the trademark, with both sides alleging they own it. Eventually, the case was settled by
What can you do? The above selected examples represent the IPR problems commonly faced by overseas business in China. What can you do to prevent the problems?
Danone selling its stake in the joint venture to Wahaha at an undisclosed price. This case was reported by the Chinese media as a “success” in defending local brands against international acquisitions.
Here is a check-list to think about: •
Protect your IPR in China before you enter the market
•
Start early
•
Know your partner
•
Register your IP rights
Those who have litigated in China for IP infringements may know that the damages you
•
Make sure your rights are protected appropriately
can generally get do not usually exceed a several hundred thousand RMB. The statutory
•
Protect your confidential information/IP know how
damages for patent infringement is RMB 1 million and for trademark cases is half a million.
•
Have appropriate contracts/agreements
CHINT v. Schneider The highest damages awarded for a simple Utility Model Patent
However, there are exceptions. These are just some of the many things to look out for. The legal system in China is In one judgment from the Wenzhou Intermediate Court, it awarded record-breaking
now at the stage that it can protect IP owners. The trick is to make it work for you
damages of RMB334 million (US$47 million) in favor of CHINT, a large Chinese electric
and not to leave it till it’s too late.
products company, in a patent infringement case against Schneider, one of the world’s
2
w w w.britcha m.com
The Magazine of the British Chamber of Commerce in Hong Kong
CHAIRMAN’S MESSAGE
Editor
Well the summer holidays have come and gone since I last wrote to you. I hope that you all had a chance to get away or spend some
Ian Cruz
quiet time with family before we sent the kids back to school. With the pace of life in Hong Kong, we all need a good break to recharge
Design
our batteries before we get back into work mode.
Bill Mo Alan Wong Ken Ng Man Lo
I was lucky enough to spend some time in the UK and Europe, and one of the first things I usually notice when I visit Europe is the air
Advertising Contact Charles Zimmerman
Project Management Vincent Foe
Jointly Published by Speedflex Medianet Ltd and The British Chamber of Commerce in Hong Kong 1/F, Hua Qin International Building 340 Queen’s Road Central, Hong Kong Tel: 2542 2780 Fax: 2542 3733 Email: info@speedflex.com.hk Editorial: Ian@speedflex.com.hk Advertising: charles@speedflex.com.hk
quality. Although it remains good, I did not notice it as much this year as we have had wonderful clear skies in Hong Kong recently due to strong southerly winds which gave us one of the clearest periods of blue sky and visibility that we have had in years. I am also aware the government is focused on improving our air quality, and with some Mainland heavy industry moving North and West, maybe we are in for better times. Let’s hope the clean air trend continues, as I know that pollution levels in Hong Kong have been a key deciding factor for multinationals when they choose to set up regional HQs in Asia. Still on this point, only two months ago, I spoke at the World Economic Forum in Vietnam regarding ‘Green Jobs’. I am an advocate that every job has a green dimension to it, and with a thorough understanding of reusable energy, carbon emission management, agile working and effective power usage by each individual, we can all make a positive impact on our environment. I often talk about ‘Digital Natives’ (those who have been brought up from day one with technology) and ‘Digital Immigrants’ (every one of us who took to technology late – that’s me and probably the majority of us). If you apply this concept to the environment, we are all ‘Green Immigrants’, except of course the children of today. With the right education, our children can actively change the world we live in. Now would it not be fantastic if Hong Kong could become a leader in Smart Grids, Smart Towns and renewable energy – another subject no doubt our Environment Committee shall focus on this year. Over the summer, I was in New York at a Global Management team meeting and talking about ‘Digital Immigrants’. I was amazed at
British Chamber of Commerce Secretariat
functionality from these and similar products is fantastic, and I firmly believe these smart technologies are here to stay and will surely
Executive Director
take over the need for dedicated PC’s at home or in business. On talking to one of the large Financial Services companies in Asia,
CJA Hammerbeck CB, CBE
they have decided to stop any further investment in desktop PC’s and have allowed their staff to purchase their own modes of access
General Manager
devices, saving them significant capital expenditure and maintenance costs. With the right level of security now available, I have no
Cynthia Wang
doubt these items and similar other brands will be at the top of your Christmas or business list this year.
Marketing and Communications Manager
Also remember that next month, the Bledisloe Cup Rugby competition between Australia and New Zealand is taking place in
Hilary Thomas
Hong Kong on October 30th. The event should be a wonderful day for sport in Hong Kong with over 3000 children in the morning
Special Events Manager
attempting to break the Guinness World Record for Mini Rugby at HKFC and Valley. The day continues with a British Chamber Rugby
Becky Roberts
Long Luncheon at HKFC and then the Bledisloe game. Let’s all support these fantastic events, and for those who have not booked
Business Development Manager
tickets for the main game through the Chamber, tickets are available directly from the Union.
the number of people in our management team and in the general public using the new Apple iPad – and even the new iPhone 4. The
Dovenia Chow
Membership Executive
As I write this article a few days after the horrific incident in Manila where we have tragically lost Hong Kong citizens, my heart goes
Lucy Jenkins
out to the families and friends of those sadly taken away from us. Our Chamber has sent a condolence message to the families via the
Accountant
Chief Executive of the HKSAR government.
Michelle Cheung
Executive Assistant
Finally, it is very important that we get things right at the Chamber and as I get the chance to meet members over the coming months,
Jessie Yip
I ask you to please share your thoughts on how we can make the Chamber an even better enabler for business in Hong Kong. I hope
Secretary
that you enjoy this issue of the magazine.
Yammie Yuen
Office Assistant Sam Chan Kevin Taylor
Room 1201, Emperor Group Centre, 288 Hennessy Road, Wanchai Tel: 2824 2211 Fax: 2824 1333 Website: www.britcham.com © All published material is copyright protected. Permission in writing from the Publishers must be obtained for the reproduction of the contents, whole or in part. The opinions expressed in this publication are not necessarily the opinions of the Publishers. The Publishers assume no responsibility for investment or legal advice contained herein.
CHINA WRAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 TRUST PLANNING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 QING WANG & JERRY LOU . . . . . . . . . . . . . . . . . . . . . 8 MARKETING IN CHINA . . . . . . . . . . . . . . . . . . . . . . . . 9 BRAND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . 10 PROFESSIONAL DEVELOPMENT . . . . . . . . . . . . . . . 11 PROJECT COOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 LONDON REAL ESTATE . . . . . . . . . . . . . . . . . . . . . . . 14 STRATEGIC SHOCK . . . . . . . . . . . . . . . . . . . . . . . . . 15
BRUCE BRIDGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . VINTAGE WINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LOW CARBON EXHIBITION . . . . . . . . . . . . . . . . . . . . ENERGY CONSERVATION . . . . . . . . . . . . . . . . . . . . . ENVIRONMENTAL ENGAGEMENT . . . . . . . . . . . . . . INVESTMENT DECISIONS . . . . . . . . . . . . . . . . . . . . . NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NEW MEMBERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SHAKEN NOT STIRRED . . . . . . . . . . . . . . . . . . . . . . .
16 17 18 19 20 22 24 26 27
ECONOMY
By John O’Connor, National Australia Bank Economist
On
China - Real retail sales balance, economic activity in China appears to have moderated. Industrial
production, exports and construction activity fell, while retail sales increased. The outcome is broadly in line with our view that growth in some sectors would slow owing to the natural evolution of the economic cycle and policy tightening. In particular, the small declines in housing sales, house prices and construction activity are the desired outcomes of contractionary policy measures. We are reluctant to over emphasise the slowing given the monthly volatility in many Chinese statistics. Therefore, we continue to expect growth of slightly more than 10% in 2010.
Percentage change, adjusted for Chinese New Year % 18 12 6 0 -6 -12
% 6 4 2 0 -2 -4
Yeae-ended (lhs)
Monthly*(rhs)
2004 2005 2006 2007 2008 2009 2010 * No observation in shown for January; February shows the average of January and February compared to December. Source:CEIC,Nab
Residential property prices are stalling, with the 70-cities measure reporting unchanged
What China is making
house prices in July. Further, credit for property purchases fell sharply in the June quarter.
Momentum in the manufacturing sector has continued to slow. We estimate industrial
Overall, the developments reduce the risk of a housing bubble forming.
production fell by around 2% in July and growth over the year moderated to 13.4%. The average of both PMI measures (the NBS and HSBC) reinforces this view.
China - 70-cities House Price Index Percentage change
%
China - PMI
12
Avetage of HSBC and NBS measures Index
Index
60
Nab adjusted
55
8
3
Yeae-ended median (lhs)
2 1
4
55
50 45
60
%
Yeae-ended (lhs)
50
Published
45
40
40
35 2005
0 -4 2004
2005
2006
Monthly (lhs) 2007
0 -1 2008
2009
2010
35 2007
2009
What comes next?
* Adjusted for Chinese New Year and seasonally adjusted
Inflationary pressures remain benign and shall not dictate policy in the second half of 2010. The CPI rose by 0.4% in July and year-ended growth accelerated to 3.3% (from 2.9%). The pickup has External demand is important to Chinese manufacturers, with almost half of all production ultimately exported. We anticipated export growth to decelerate as the transitory effects of stimulus and inventory restocking in trading partner economies fade. Export earnings
been driven by higher food prices, due mostly to volatile meat and vegetable prices. Chinese policy remains on a tightening bias but there’s less urgency to tighten, thanks to contained inflationary pressures, less rapid house price growth, and some moderation in economic growth.
fell by 4% in July following negligible growth in June.
China - Exports
While care has been taken in preparing this material, National Australia Bank Limited (ABN 12
Percentage change, calculated in renminbi terms %
Index
New export orders (diffusion index, rhs)
004 044 937) does not warrant or represent that the information, recommendations, opinions or conclusions contained in this document (“Information”) are accurate, reliable, complete or
40
60
20
50
0
40
current. The Information has been prepared for dissemination to professional investors for information purposes only and any statements as to past performance do not represent future performance. The Information does not purport to contain all matters relevant to any particular
Export Values (year_ended percentage change, Ihs)
-20
30
-40 2002
20
investment or financial instrument and all statements as to future matters are not guaranteed to be accurate. In all cases, anyone proposing to rely on or use the Information should independently verify and check the accuracy, completeness, reliability and suitability of the
2004
2006
Information and should obtain independent and specific advice from appropriate professionals or experts. To the extent permissible by law, the National shall not be liable for any errors, omissions, defects or misrepresentations in the Information or for any loss or damage suffered
Has a downturn in manufacturing begun?
by persons who use or rely on such Information (including by reasons of negligence, negligent
All indicators suggest the sector is slowing, not stalling - and certainly not contracting.
misstatement or otherwise). If any law prohibits the exclusion of such liability, the National
Major trading partner growth is projected to be relatively healthy, and domestic demand is
limits its liability to the re-supply of the Information, provided that such limitation is permitted
expected to still grow over the next year.
by law and is fair and reasonable. The National, its affiliates and employees may hold a position or act as a price maker in the financial instruments of any issuer discussed within this
What China is spending
document or act as an underwriter, placement agent, adviser or lender to such issuer.”
Household spending has remained very strong. Real retail sales increased by 1.3% in July and by 14.7% over the year. New car sales remain strong and measures of consumer confidence have risen further.
National Australia Bank has had a presence in Hong Kong for almost 30 years. The Pacific Place branch offers local & overseas mortgages as well as competitive term deposits in 10 currencies. See www.nabasia.com or call 2826 8111. S eptember 2010 • Vol 25 • No 8
5
RAW L EGULATION
Succession planning with trusts By Katie Graves, Partner, Withers LLP (London) and Philip Munro, Associate, Withers (Hong Kong)
There
are popular misconceptions regarding trusts to the effect that
Family company shares
trusts are either arrangements useful only for the globally wealthy or that their use
The settlor may wish to encourage his children to become involved in the family company
ended in the early twentieth century such that they are now found only within the
but is, perhaps, unsure of the relative extent to which one child or another should benefit. If
realms of Victorian literature. Trusts can, however, be very useful tools for families
he transfers the shares to a trust, the settlor can remain in control of the company by acting
undertaking succession planning today, whatever the extent of their wealth, if there
as one of the trustees and (subject to his duties as trustee) can thereby continue to exercise
are circumstances which mean that they might not want to pass their assets to other
voting control over the shares gifted into trust. The settlor may also continue to exercise
family members outright. We explain below how trusts operate and can be formed
management control as a director.
and then outline the benefits of trusts in succession planning. As we consider below, any trust planning for a family with UK connections needs to carried out in conjunction with tax advice.
Trusts to protect assets Trusts can be used in certain limited circumstances to protect the settlor’s assets from creditors, disinherited heirs, claims by the ex-spouses of children or grandchildren, and the
What is a trust?
risks associated with political instability.
A trust is a mechanism whereby one person (the ‘settlor’) gives away the enjoyment of assets to a group of individuals (the ‘beneficiaries’) while control and decisions on the administration and investment of those assets lies with others (the ‘trustees’). The extent of the interest of the beneficiaries in the trust property depends on the precise terms of the trust: many trusts are ‘discretionary’, meaning that no beneficiary has any necessary right or
Preserving pension plan death benefits Benefits under pension and retirement plans set up by an individual for his own benefit may provide lump-sum death benefits. These may be subject to inheritance tax (IHT) on the death of the individual unless steps are taken to transfer the plan into a trust.
entitlement to any part of the trust fund. The trustees hold the legal title to the assets upon trust for the beneficiaries. Their duty is to administer the assets in the trust and eventually, to distribute them in accordance with the terms of the trust deed. They must always exercise their powers in the best interests of
How are trusts created? A trust can be created by deed during a settlor’s lifetime or under the terms of their will (such trusts are often referred to as ‘Will Trusts’).
the beneficiaries and in particular, must not allow their own interests to conflict with those of the beneficiaries. If they commit a breach of trust, they may be liable to make good any
Use of trusts in tax planning
loss out of their own pockets. In some situations, it is possible for the settlor to be one of
For non-UK domiciled settlors, trusts can offer significant capital gains tax (CGT) and IHT
the trustees.
planning opportunities: trusts can be used to keep assets outside the scope of IHT if the settlor’s domicile status changes and can be used to shelter income and gains from UK tax
Trusts are used for a wide range of purposes:
if the settlor becomes UK tax resident.
Trusts for children/grandchildren
For UK domiciled and resident settlors, there are now fewer tax advantages in creating
Parents or grandparents often create flexible trusts for the benefit of children or grandchildren who may be too young or financially unsophisticated to benefit from an outright gift. Trusts can also be used to provide for children from a previous relationship.
trusts and, in certain circumstances, there may be tax disadvantages in creating a lifetime trust. That said, it is possible for a UK domiciliary to fund a trust in some circumstances with no immediate IHT charge if the value of the trust is below the ‘nil rate band’ amount of £325,000, or the trust is funded with certain types of business property or surplus income.
Trusts for the disabled A trust can be used to hold and administer assets for those who are unable to hold assets themselves, e.g. the mentally disabled.
If property is settled into a lifetime trust that is drafted in the correct form, it can fall outside of the settlor’s estate for UK IHT purposes on their death (and so avoid tax at 40% at this time). The UK IHT regime can also treat certain types of Will Trusts (e.g. those for surviving spouses and the disabled) favourably.
Any queries in relation to this article can be sent to Philip at philip.munro@withersworldwide.com or on (852) 3711 1671. This article does not constitute legal advice and cannot be relied upon: full legal and tax planning advice should be sought before any trust planning is undertaken. S eptember 2010 • Vol 25 • No 8
7
CHINA Sponsored by
In a World of Sovereign Turmoil and Domestic Tightening is China Heading for a Hard-landing? By Ian Cruz
As
many of the western economies continue to
Looking to China’s future, Jerry Lou commented on what we can expect the economic
recover from the upheaval of the financial crisis, China’s
outlook to be like in the Mainland ten years down the line, focusing on the country’s
measures against property market speculation quelled
geography, population demographic, and its currency. He predicts that by 2020,
optimism about the state of China’s economy, and more
China will become one of the
wide spread acceptance of the “China hard-landing” view
largest, if not the largest, consumer
arose. Offering their insight on the subject, Morgan Stanley’s
and healthcare markets globally.
Chief Economist for Greater China, Qing Wang, and
Speaking about other facets of its
Hong Kong and China Strategist, Jerry Lou gave a talk to
economy, he states that China will
Chamber members at the Island Shangri-La in June.
likely have improved infrastructure, more urbanisation, a free media, and
8
Speaking in detail about the uncertainties that the China
be a major culture exporter. Jerry
economy is currently facing in terms of its internal environment and policy environment, Qing
concluded by emphasising China’s
Wang stated that the Mainland can expect to see a Goldilocks Scenario this year, meaning high
momentum and the opportunities
growth, with low inflation. He cites that the weak global recovery will help China to manage
available to business operators in
inflationary pressure, while the micro policy environment will sustain strong domestic demand.
this high growth market.
w w w.britcha m.com
BUSINESS
China teaches IKEA limits of homogeneity Not yet part of the Eastern furniture This article was taken from the online journal collection of Emerald Management First - http://first.emeraldinsight.com supplied by Emerald Group Publishing Limited.
Going global For IKEA, the world’s largest furniture retailer, China has proved to be something of a
the Billy bookcase range, that inexpensive staple in many UK homes, was seen as a luxury
learning curve. Founder Ingvar Kamprad opened the first IKEA store in Almhult, Sweden,
in China. The main strategy has been to cut prices and in order to do so, IKEA in China
half a century ago and the company’s expansion since then
has been allowed to ignore the usual company sourcing
has been remarkable. Today, IKEA owns 216 stores in 24
guidelines. It has been allowed, for example, to exceed and
countries. Counting franchises outside the IKEA group, the
expand its source of products in China, while the rest of
figure rises to 292 stores in 36 countries and territories.
IKEA still sources the same products from elsewhere.
China joined the IKEA “family” in 1998. In 2006, there were three stores there – in Beijing, Shanghai, and Guangzhou –
IKEA stores in China are closer to the city than stores in
and there are plans to build ten by 2012.
other parts of the world, where they are usually located well outside city centers. In China, fewer consumers have
A characteristic reckoned to make IKEA stand out among
access to cars and stores have to be on public transport
global retailers is its standardised approach to every market
routes. Nevertheless, IKEA has built 700 parking places
it enters. Allegedly, IKEA looks and operates the same in
under the Shanghai store in the expectation that shopping
every market. However, China is in many ways a culturally
patterns will change. Home delivery services are more
different market, which has provided huge challenges for
common and used more often in China, and another
IKEA. Johansson and Thelander examined IKEA’s approach
significant difference is the number of entrepreneurs who
to China using primary and secondary data, including
have set up home transport services for IKEA customers
previous studies on the company’s strategy, and advertisements and internal documents.
along with home assistance in assembling the furniture.
Top level IKEA managers were interviewed. They defined strategies on country level and at store level in order to provide insights into marketing strategies and tactics. Ten interviews were conducted including managers responsible for the Chinese market as well as lower level store managers based in China.
Social consumers Although products are pretty much the same, Chinese stores look different inside. IKEA tries to build the room settings in a way that feels relevant to Chinese customers with sizes of rooms and kitchens that are realistic by Chinese standards. So even with the same
More people, narrower range
products, a store in Shanghai looks very different from one in Malmö.
The basis of the marketing strategy is the merchandise, which is supposed to be the same all over the world. The total product range covers more than 10,000 items. Very small
While IKEA is often seen as a model of standardization among retailers, it is clear that it has
adaptations are made for all countries and all stores.
had to make substantial adjustments in China. Offering an attractive and different product was never itself going to be enough. IKEA argues that the “worst” is now over in getting
In a nation with a huge population like China, IKEA does not target as many people as in
established in China, and that the lessons learned will stand it in good stead as it expands
other countries. The main target group is female, as they are considered to be those who
into other culturally-different markets.
make decisions about the home. IKEA believes its core customer to be around 30 years old. This target group is the generation born during the One Child Policy and they are
IKEA would argue that it has adapted, while remaining true to its business concept.
believed to be impulsive, easy to influence, very social, and committed to leading foreign
But its experiences also show that there are limits to how far a business can go with
consumer brands. There are various adjustments to products to fit national demand. At the
standardisation, and how far along that road consumers are willing to be taken. Global
moment the beds sold are shorter - 190cm compared with standard-sized beds of 200cm.
business supremos might not want to know two cultures intimately, but they do have to be
Many Chinese people live in apartments with balconies and IKEA has added model sets
aware of some prevailing attitudes within a society very different from their own.
and special balcony sections in the stores, which show how you can furnish your balcony. However, there are some more significant challenges for IKEA in China. In most countries
For further details please contact Sarjit Kaur: at sarjit@emeraldinsight.com or telephone
the image of IKEA is of a company with low prices. In China the opposite applies and even
+603 8076 6009 S eptember 2010 • Vol 25 • No 8
9
BUSINESS
The Internationalisation of China’s Brands Will Singapore Steal the Prize?
By Alistair Monteith-Hodge, Director, Brand Finance
As
the concepts of branding and brand management take hold in China, recent surveys
of China’s brands indicate that while their monetary value is outpacing GDP at home, many
incurred in acquiring IP, tax deductible patent costs, and tax exemptions for royalties and interest if reinvested in R&D.
leading Mainland-owned brands are reporting increased international sales via acquisition and expansion fuelled growth.
Secondly, it has enacted IP friendly legislation, including extension of the copyright term to 70 years, rights enforcement on the Internet, and compliance measures relating
This internationalisation of China’s brands is rapidly raising the importance of branding in the
to parallel imports. It has also invested in IP education by establishing a national IP
eyes of business managers and decision makers. It also creates an opportunity for Hong
academy and creating learning opportunities for IP professionals, businesses and
Kong to partner with Mainland brand owners in the global management of their brand-
research organisations.
related Intellectual Property (IP). Hong Kong, while lacking the ability to negotiate its own international IP treaties, is As valuable assets, successful brands are increasingly freely traded, licensed, insured
nonetheless a much more obvious cultural fit for Mainland brand owners. As the IPO
and securitised. A strong brand confers on its owner many significant benefits, including
destination of choice for many Chinese companies, Hong Kong appears to have all the
stable cash flows, increased sales or pricing power and reduced distribution costs.
prerequisites, including: a low tax regime, a well-developed legal system with clear rules
Recent changes in accounting standards have resulted in brands appearing more often
governing IP and brand licensing, an international arbitration centre and world-renowned
on a company’s balance sheet, and investors are increasingly recognising the strength
court system, an abundance of lawyers with China and global IP portfolio management
and stability of brand income streams. Companies that can demonstrate effective brand
experience, world class financial and corporate infrastructure with financing and access
management are often highly rewarded by shareholder confidence and a share price that
to capital backed by strong legal protection, ease of corporate set up spin-outs creation
outperforms stock markets.
of subsidiaries or flotations, and innovation, creativity and brand management expertise backed by Hong Kong’s role as a regional marketing hub.
In a traditional business model, the legal owner of IP is also the economic owner. Increasingly for multinationals however, economic and legal ownership of IP is held in
Yet for all these, Hong Kong remains snookered in its ability to operate as an
different entities, or economic ownership is shared by both the legal owner and other
IP management hub for the internationalisation of China’s brands by its inability
group entities.
to negotiate international IP treaties, such as the Madrid Protocol on trademark protection, in its own right. With a focus on inbound IP protection for foreign brands
Significant commercial and financial benefits accrue to organisations that transfer
entering China, we may miss the unique opportunity that China’s brands offer as they
the management of international brands to dedicated entities located in IP and tax-
expand into new markets.
friendly jurisdictions. Switzerland and Ireland have become brand management centres for companies such as Vodafone, Shell and Nestle, and many Mainland brand
Hong Kong needs to foster IP awareness and build capability by providing professional
owning companies are being courted by Singapore, which as a sovereign state, has
education and training for the IP, business and technical communities. It also needs to
negotiated international IP protection treaties and established itself as an offshore
strengthen legislation to give China’s brand owners the confidence that their brands
financial centre.
are well-protected here. More importantly, the government needs to build a strong IP regime that removes Hong Kong’s isolation from the international IP system. That’s a
Benefits of such arrangements to brand owners include: better brand management and
tall order.
resource allocation (and therefore higher return on brand investment), improved royalty earnings streams from brand licensing activities, more effective IP protection / governance and controls,
Inevitably, this means working within the context of China’s international agreements
and greater visibility of the marketing function and the brand as a strategic business asset.
to strengthen the link between creation and exploitation of IP, and the development of strategies and legal structures designed to help Mainland companies exploit their brands
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What can Singapore offer a Mainland brand owner? Firstly, the government has created a
internationally through Hong Kong. It also means raising Hong Kong’s profile in the Mainland
range of fiscal incentives that encourage the establishment of IP management companies.
IP arena by showcasing its advantages. Without this, China’s brand owners won’t know
These include: tax credits on royalty income, 5-year write-down allowances for capex
what Hong Kong has to offer, and Singapore will steal the prize.
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TALENT DEVELOPMENT
Dipping into Hong Kong’s talent pool The British Chamber’s IT Committee, working in collaboration with the Vocational Training Council, has recently launched the Graduate Enhancement Training Scheme for IT (GETsIT) – a training scheme aiming to develop the skills of selected VTC fresh graduates in the IT sector through work placements in four Hong Kong corporations. Ian Cruz speaks to CLP’s Joe Locandro and BT’s Tim Smart to find out more. By Ian Cruz
To
say Hong Kong has one of the most competitive job markets in the world would be an
necessary discipline and drive to become successful in the world’s blue chip companies. “The
understatement. With its status as an international financial centre, vibrant economy, and ties
successful candidates all have to have the required skill-sets for the positions we are looking
to the market in China, it acts as the Asian hub for numerous global blue chip companies. As
for, but it is extremely important from BT’s point of view that they have the ambition and the
these organisations find the right people to fill the limited number of placements to join their
desire to be successful. Basic skill-sets aside, the right attitude and a hunger to do well are
companies, candidates face competition from both a local and international pool of potential
the most important things to us,” says Tim.
employees. For fresh graduates who have just come out of higher education, having gone to a prestigious university can also gives some people in the job market an advantage over
Throughout their work experience, each chosen candidate will work alongside a mentor
others. This unfortunately means that many candidates don't often find themselves in a
– an existing senior member of the company who will assist them in growing in their roles
position where they can have the opportunity to work with a top tier company in Hong Kong.
and help familiarise the candidates with a large corporate environment. The candidates will then be appraised at the end of six months by their respective mentors to provide beneficial
In looking to help remedy this situation and help develop the local talent here in Hong Kong,
feedback about the quality of their work and address any gaps in their skill set.
the British Chamber’s Information Technology Committee are working in collaboration with the Vocational Training Council (VTC) on the Graduate Enhancement Training Scheme for IT. The
Since the chosen candidates have started in August, the reaction to the scheme has been
development scheme offers higher diploma information technology graduates from the Hong
positive, with management from the participating companies embracing the opportunity to
Kong Institute of Vocational Education (IVE) with two years of professional training in four of
help the individuals, and candidates offering a fresh and objective view to help them grow
Hong Kong’s largest corporations - CLP Group, Hong Kong & Shanghai Banking Corporation,
further. “The IT management team at CLP has been very supportive towards the graduates.
British Telecom and Atos Origin. The short listed candidates will work six-month placements
We have encouraged them to ask plenty
in each company on a rotational basis as they further develop their skills in IT, and broaden the
of questions. This will accelerate their
scope of their work experience.
learning. Most of their colleagues are also encouraged to draw out questions from the
For the participating companies, the Graduate Enhancement Training Scheme for IT provides
graduates so that they do not need to fear
a means for corporations to show their commitment to developing local talent in the Hong
asking about things,” says Joe.
Kong IT sector so they may acquire the skills to grow and eventually thrive in the IT workforce. Joe Locandro, Director - Group Information Technology from CLP explains, “Talent in the IT
Though only a couple of months old, the
industry needs to be nurtured for the benefit of Hong Kong as a whole. It is pleasing to see
Graduate Enhancement Training Scheme
that companies such as CLP are willing to invest in the future talent for Hong Kong. It is hoped
for IT has already drawn interest from other
that the graduates will attain skills and knowledge from real work and projects, working in “best
large corporates to join next year. While
in class” IT departments in blue chip organisations. We are able to impart the knowledge and
the scheme presently caters for those
skills using very sophisticated technology and applying it to business solutions. All this should
trained in information technology, company
augur well for the graduates to enter the workforce on a full time basis.”
management from those involved would like to see schemes such as this eventually
For the candidates, they are also given a crucial and much needed opportunity which would
expanding to help candidates from other
normally not be available to them, to gain real work experience in some of the leading
disciplines as well. “As a result of the
international corporations. “Finding the right first job opportunity can make a big difference to
success of this program, we have already
a person, their career and even outlook on life. This program really gives these young people
had a number of additional companies
a chance to get started on the job front with some very high profile companies,” explains Tim
interested in joining the VTC program. For
Smart, Regional Head of Sales Operations & Organisational Improvement for British Telecom.
the moment we are focusing only on IT although over time we may increase the
The selection process for the scheme was rigorous, as participating companies had to
scope of this program to include other
choose the right type of candidates for their open positions. Aside from the technical
areas of business,” says Tim.
skills needed to do the work, management were looking for graduates who also had the S eptember 2010 • Vol 25 • No 8
11
CSR
Cooling off in the Antarctic By Ian Cruz
The
Antarctic has long been the “poster child” for curbing climate change, serving
at a much faster rate than normal. Only when I heard it every few hours did I notice that it
as the example of how the world’s rising temperatures are physically changing our
was in fact happening quite often and drove home the fact this (climate change) is really
environment. Bringing this issue to the forefront of its sustainability initiatives is power
happening.” The Antarctic’s local wildlife is also at stake, as penguin colonies experience
company CLP, with its long term commitment to reduce climate change through Climate
early winters, increasing their death rate.
Vision 2050, which aims to reduce the carbon emission intensity of its generating portfolio by 75% by the year 2050. One programme that CLP had implemented to work towards that goal is Project COOL (Climate ActiOn JuniOr League), an initiative which provided an innovative learning opportunity to outstanding CLP engineers to apply their professional skills to a meaningful cause, while at the same time enabling them to engage the community in a better understanding of the issues of climate change. Working together with the non-profit organisation 2041, set up by explorer Sir Robert Swan, Project COOL looked to accomplish two main goals. The first was to take young CLP engineers from Hong Kong, India and Australia, branded the ‘COOL Captains’, on a three week expedition to Antarctica to install renewable energy (RE) devices for an education research centre called E-Base, which had been set up by Sir Robert Swan to demonstrate clean technology and energy saving techniques to the world. Damaged by a storm last year, the E-Base had been rendered inactive due to a lack of power; something the COOL Captains looked to rectify during their expedition by erecting
However, amidst their new and eye opening experiences, the team managed to successfully
new wind turbines and installing extra
install the renewable energy devices for the E-Base, making it once again operational for 2041 to
solar panels to power the E-base.
continue their environmental education, research and the preservation of Antarctica’s environment.
As part of Project COOL, throughout
Following the expedition, the second goal of Project COOL was presenting what the COOL
t h e i r s t a y i n A n t a rc t i c a , t h e C O O L
Captains had learned during their first hand experiences in Antarctica and engaging the
Captains also took part in leadership training programmes along with young professionals,
community with their new found knowledge and providing methods to reduce the affects
corporate leaders and university students from other countries revolving around environmental
of climate change; particularly to the younger generation. This was primarily done through
protection. However, what was truly eye opening for the COOL Captains was the opportunity
CLP’s Young Power Programme and saw the COOL Captains provide workshops and
to marvel at the vast Antarctic environment around them. However, while providing scenery
seminars at schools across Hong Kong and India. “We’d like them to take the initiative
like none other in the world, the COOL Captains got to witness first hand, the physical affects
themselves so when they go back home or to school, they can act as leaders to promote
that man has had on the environment both directly and indirectly. “We went to a place called
a low carbon economy for the future of Hong Kong. We take what we learned in Antarctica
Paradise Harbour and when we landed, Robert Swan showed us beer cans and other
and offer them a practical way to turn it into a reality,” explains Sandeep.
garbage that had been left there 50 years ago by workers building a base before the Antarctic Treaty was signed. That was shocking to me,” explains COOL Captain, Priscilla Chang.
With the success of Project COOL, CLP have illustrated how corporations can make use of their resources, man power, and know how to curb negative environmental impacts, and reach
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Rising temperatures have also had a tangible affect on the Antarctic’s picturesque
out to their respective communities to do the same. The COOL Captains hope that initiatives
landscape, as demonstrated in 2002 when Larsen B, an ice shelf roughly forty times the
such as these will serve as an example to other companies to follow suit. “A goal of ours is to
size of Hong Kong island, broke off from the rest of the ice. This problem still persists as the
help companies move towards a more sustainable business. We share our vision with other
Antarctic’s ice slowly continues to melt away. “When I was going to sleep at night, I could
companies, and they can learn from us. We also learn from other leading companies from
hear sounds of ice falling into the sea,” said COOL Captain Sandeep Sharma. “I realised that
around the world. They have their own ways of fighting climate change, so we learn from each
it was the ice melting, which is a normal phenomenon, but the thing is, it was happening
other. From that, we can help our company to be a more sustainable business.”
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REAL ESTATE
London Central Residential A Class Apart
Mistakenly confused with the UK or cast as commercial property’s “poor relation”, London’s top postcodes come into their own By Naomi Heaton, Chief Executive, London Central Portfolio Limited
Just
six square miles of trophy homes in Monopoly board addresses, the world’s
love affair with London Central continues to underpin demand. More closely aligned to the
levels and comparatively low interest rates resulted in rapid price increases until they hit the ceiling of affordability.
international economy than the UK, London Central enjoys the attention of investors around the world whilst strict limits on new developments squeeze supply. After all, there is only
In contrast, London Central saw growth, as the international investor dallied in response to
one London Central.
9/11, tumbling share prices and the Afghan and Iraqi conflicts. With only 100 or so sales a week, investor sentiment can have a dramatic effect. From 2006-2008, whilst the rest of the
Over the last 40 years, London property prices have doubled on average every 8 years.
UK tailed off, London Central experienced a period of ‘catch-up’ before both markets ran
Despite market falls during the credit crunch, cheap sterling, cheap debt and the capital’s
into the brick wall of the Credit Crunch.
enduring appeal made the dip short lived. If prices are to follow long term trends they should double again by 2016.
Despite transactions in London Central dropping a staggering 70% to literally a handful a week, prices only fell by a relatively modest 15% - evidence that the cash rich, lowly geared
Add to this UK tax incentives, not touched in the recent emergency budget, and London
owners of London Central property are rarely forced to sell when the going gets tough. As
Central provides a heady mix. Not only can an investment be structured to pay no income
investor confidence has returned to the international stage, London Central has bounced
tax, non-res and non-dom investors should be exempt from capital gains tax and with
back to pre-squeeze levels in just 12 months. Meanwhile, the rest of the country has
correct planning, inheritance tax in the UK.
enjoyed just a mild rally. As it faces up to the Coalition Government’s austerity measures and general uncertainty over the health of the domestic economy, it is likely that it will
Why “residential” is the new “commercial”? UK commercial investment has always been an income play with minimal capital growth. The rapid appreciation in values from 2004-2007 represented a break from the norm and
struggle for some time to come. Since January, government statistics show that prices across England and Wales have remained largely static, whilst London Central has shown sustainable growth in excess of 5%.
made a correction inevitable. London Central residential, on the other hand, has always provided a balance of income and long term capital growth. Average appreciation has
The future for London Central?
been 9.5% per annum since 1969 and rental yields currently run at about 5%, whilst the
With global appetite back with a vengeance, sterling still at historic lows, and two years
Bank of England’s base rate holds at just 0.5%. As the most visited foreign destination, the
of ‘lost growth’, there is a strong chance that the market will out-perform its long term
corporate rental market for London’s top postcodes has held firm.
trend. If the market doubles in value again, as it has done repeatedly over the last 40 years, then average appreciation will have to sit above 11% from now until 2016. No doubt, if
During the economic turmoil of the last few years, many of the perceived ‘weaknesses’
there is a double dip recession in the UK, some negative sentiment will brush off on the
of residential property have turned out to be strengths. The greater opportunity for
London Central market, but bad news in the UK is more likely to remain good news for the
diversification within residential, despite the headaches it can bring, spreads risk. The
international investor.
inherent tenant turnover in residential, whilst management intensive, ensures that systems are in place to reinstate occupants. In contrast, if a commercial tenant defaults
If one of the worst economic crises in history has taught us anything, it is that London
on their lease, extensive voids can leave investors floundering. A weak domestic
Central is in the hands of a very few and as long as it remains the playground of the rich,
economy has far more impact on commercial property than in the internationally
with some of the most coveted real estate in the world, prices will continue to rise.
populated residential sector. With over 70% of commercial debt maturing in the next 5 years, lenders are likely to toughen loan covenants meaning commercial could struggle
Whilst pundits may argue about the quantum of the recovery, as the top postcodes become
for some time to come.
more and more desirable and even harder to get hold of, most agree that investor returns are more a question of ‘time not timing’.
The UK and London Central: A tale of two countries The average price of a property in London Central is over five times that of the UK and beyond the reach of most ordinary folk. Not surprisingly, the UK residential market responds to influences within the domestic economy. In the early 2000s, high employment
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For more information, please contact Hugh Best, Head of Investment Management, on +44 (0) 207 723 1733 or hugh.best@londoncentralportfolio.com
CONSULTANCY/MY HONG KONG
Strategic Shock By Sir Robert Fry KCB, CBE, Executive Chairman, McKinney Rogers Group
A
‘strategic shock’ is what I would term as an event taking place in the world which
Sometimes successive strategic shocks bounce against each other. Our response to 9-11
consequently requires us to think very differently about the way we live or differently about the
followed by the financial crisis in 2008 meant that the west embarked upon a series of
way in which we do business. I would suggest that in the last 10 years there have probably been
campaigns that it is now fundamentally ill-equipped financially to discharge.
three strategic shocks. The first one is obviously 9-11, which required us to look at the entire global security landscape in a completely different way. The second was the financial collapse of
The increasing complexity of the world that we live in, and the fact that I think there is a
2008, which then led to an entirely different relationship between state debt and the economy.
susceptibility to these upheavals, constantly requires us to reappraise how we operate.
The third and most recent is the BP oil spill in the Gulf of Mexico.
I have no idea what the next strategic shock might be. It could be the collapse of the European currency, it could be something around the life sciences genome research,
You may immediately think this is nothing as big as the first two. I actually think it will be.
it could be an attack by Israel into Iran, aided and abetted by Saudi Arabia and the
I believe it will mean that we will look at carbon extraction in a completely different way.
Gulf states, or it could be some mischief that North Korea perpetrates. I have no idea
I also believe, particularly given the interventionist tendencies of the current government
what it is going to be. The only thing I can be certain of is that there will be another
in Washington, there will be an awful lot more state regulation starting in America which
strategic shock.
will probably go on elsewhere. It has the capacity to completely change the business environment in which we operate. It is not just strategic shocks themselves which I think are
How could it possibly be any other way? The circumstances in which we live at present in
significant, but also our response to them. 9-11 happened and what was our response? We
a globalised world are such that something that happens in one part of the world instantly
went into Afghanistan and, arguably, subsequently into Iraq as well.
echoes and reverberates right around the whole world where the virtual domain is as important as the real domain. We live in a system of politics where non-state actors are just
The financial collapse happened in 2008. What was our response in Britain? To nationalise
as important as state actors. Everything tells me that these episodes are not only going
the larger debtor banks. In America there is still a policy of underwriting financially by state
to continue, they are likely to continue with greater frequency and violence in terms of the
intervention which has completely changed the internal equations of western economies.
consequences that they have.
James Walken, Director of Operations, W Hotels Where do you live and why? I live at Harbourside West Kowloon as it has amazing
What are the best and worst things you’ve eaten in Hong Kong?
views of Victoria Harbour and Hong Kong Island.
The best has been the dim sum at the W Hong Kong,
amazing harbour city.
Home cooked dinner and a glass of vino with my wife
and the worst has been duck web.
What’s the first thing you’d change about this place?
What do you miss when you are out of Hong Kong?
Nothing, Hong Kong is charming for what it is
I haven’t left yet.
And what would you keep till the bitter end?
Why did you come to Hong Kong? To further progress my career and to live in another
What are your favourite home comforts?
The vibrancy and mixture of old and new
What is Hong Kong’s top hidden gem? Still to be discovered I think, but there are many amazing
What is your life philosophy?
sights, sounds, smells and tastes in Hong Kong.
Live every day as if it were your last.
What are your current projects? Preparing to be a daddy for the first time with the arrival
What is your earliest Hong Kong memory?
What are your extravagances?
of our first child in late January 2011, Chinese New Year
Driving from the airport to the city and being
Travel.
baby??
there is in a city that is known for its high rise
How do you get about town?
What will Hong Kong be like in 2046?
buildings and vibrant life.
Either taxi or the amazing MTR system
As crazy as ever
amazed how green and how much water
S eptember 2010 • Vol 25 • No 8
15
TSAVORITE
In Search of Justice By Rory Mitchell
Bruce Bridges
, son of renowned Scottish gemologist Campbell
At first, Campbell concentrated mainly on mining rough stones, which were then sent
Bridges, was in Hong Kong earlier this year to promote tsavorite, the gemstone that his
abroad to be cut ready for sale. In the mid-80s, however, he went to Germany to learn the
father discovered in Africa in the 1960s. Campbell was brutally murdered last year following
art of cutting. “My father learned cutting in Idar-Oberstein, the place which sets the standard
years of threats from local gangsters who are backed by local politicians who aimed to take
for coloured gemstone cutting worldwide, and then brought those cutting techniques to
control of his mines in Kenya. Bruce spoke to Rory Mitchell about the history of tsavorite,
Kenya. This is something we have always prided ourselves on, for several reasons. First, we
the development of the gemstone mining industry in Kenya, and his campaign for justice for
feel the quality of our cutting is amongst the best in the world. Beyond that, a big aspect
his father’s death.
of the gemstone and diamond industry is that once mined, rough stones are exported overseas to be cut. They’re worth much more once they’ve been cut, so the country of
Campbell Bridges discovered tsavorite, a green variety of the garnet family of gemstones,
origin loses out on much of the export value. Not only have we trained local Kenyan cutters
during an expedition in northern Tanzania in 1967. After his mine there was nationalised by
for many years, we’ve also kept the value of the product in Kenya, and we’ve been able to
the Tanzanian government, he moved to Kenya, tracing the belt of geological formations
maintain our quality.”
that gave rise to the gemstone to a range of hills near the Tsavo National Park in southern Kenya. Campbell and Henry B. Platt, then president of renowned jewellers Tiffany and
So what is it that makes tsavorite so unique as a gemstone? “A good comparison would be
Company, decided to name the gemstone “tsavorite” after the national park nearby.
with emerald, the other green gemstone. Tsavorite should intrinsically be much more valuable than emerald – it’s brighter, more durable, more rare, and tends to be a more pure shade of
During the early 1970s, Campbell continued to excavate the surrounding area, living
green. However, at current market prices, you’re looking at 1/5 or 1/10 the price of an emerald
with his wife Judy in a tree house and working with Tiffany’s to introduce tsavorite to the
of equivalent quality. This is simply due to public awareness, and it’s something we’re working
international gemstone market. As Bruce explains, there were several reasons for this
on – just in the last year, we’ve seen an increase of 15 to 20% in the value of tsavorite.”
unconventional lifestyle. “First and foremost, the treehouse kept them safe from the wild animals that roamed the area (which included buffalo, cobras and leopards). It was also
Sadly, the story of this striking gemstone is marred with tragedy. For several years,
much cooler up there in the treetops. Also, they didn’t want to leave the area for too long, in
Campbell Bridges, his family and his employees had been subject to death threats from a
case people would follow them and discover what they were doing.”
local gangster and two local politicians who hoped to gain control of his mining concession. Last year, Campbell, his son and several employees of the mine were ambushed by 30-40
Campbell established the Scorpion Mine, the largest tsavorite-producing mine in the world,
men brandishing weapons; Campbell was killed during the attack, while Bruce was lucky
in the early 1980s. It was here that Bruce spent much of his childhood life when he was
to survive after taking a machete to his neck. However, the threat to the Bridges and their
not in the Kenyan capital of Nairobi. “It was named the Scorpion Mine because in the early
employees still remains; earlier this year, their head of security who survived the original
days, we used to get some pretty big scorpions, up to about eight inches or so in length.
ambush tragically lost his daughter and son-in-law who were hacked to death with only
Needless to say, you would always check your shoes in the morning!”
their ID cards taken to prove the assassination was successful. To protect the lives of his family and his employees, Bruce has stopped production at the Scorpion Mine, and is fighting to convict those involved in the attack. “We know everyone who was behind it. The central government is behind us, and the Ministry of Environment and Mineral Resources has been very helpful. But you have this local mafia that’s not listening to Nairobi, and saying they will take the mine by any means necessary. It’s a very tenuous situation right now – the central government has to put its foot down and take care of the local situation. If they let it go, the mining industry will simply collapse.” “The UK and the US are putting pressure on the Kenyans, and two of the largest colour gemstone organisations worldwide are threatening an embargo on Kenyan coloured gems if justice isn’t brought in this case. For me, the driving force in my life is making sure that my father’s dream lasts forever, and fighting for justice. It’s certainly not something I will let rest.”
For more information on tsavorite, and to sign an online petition in support of justice for Campbell Bridges, please visit the Bridges Tsavorite website at www.tsavorite.com
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LIFESTYLE
The 2009 Vintage: Was it worth the wait? By James Rowell, Altaya Wines Limited
Several
years ago, a question appeared in the Master of Wine exam along these
Fortunately, the wines did justify the frenzied anticipation and proved to be of prodigious
lines: “Bordeaux always produces a great vintage when the market demands it. Discuss.”
quality. The style and breed is most often compared to 1982, although the most recent
I am always reminded of this classic piece of cynicism when a new Bordeaux En-Primeur
vintage with a similar level of success is the 2005. I tasted no wines which could be ranked
campaign is gearing up. This year, more than ever, the expectations were orchestrated to
as poor and where a particular property seemed to be disappointing, keeping in mind that
such an extent that even veteran traders agreed they were attaining new levels. At the end
it was being judged in very exalted company. That said, the St Emilions were considerably
of March, literally hundreds of wine merchants, journalists and assorted riff-raff made their
more divergent in both style and quality than the left bank wines, and some of the red
way to Bordeaux to taste barrel samples of the 2009 vintage with two questions at the
wines from Pessac Leognan showed a trace of bitterness, as if winemakers had been
forefront of their minds: Did the quality really live up to the advanced reports which had been
tempted to make up for under-ripeness with over extraction.
circulating since last year’s harvest? And just as crucially, how will the chateaux owners set the pricing, given that a combination of economic woes and exchange rates meant that
Certainly in the major communes of the Medoc, quality is apparent right down the
wine traders in many key markets were not in the best state of financial health?
order and buyers will be able to purchase wines from fairly modest properties with the confidence that they will display the abundant fruit, firm tannins and fresh acidity which
Before leaving on my annual pilgrimage to Bordeaux, I was able to speak to two owners
typify this vintage. The white wines of Bordeaux are often overlooked and are not as
of leading chateaux when they visited Hong Kong. Neither of these gentleman has a
important in volume terms as previously, but 2009 produced some stunning examples,
reputation for hyperbole but both were adamant that the advanced reports of the high
both dry and sweet. The Pavillon Blanc produced by Chateau Margaux is quite likely the
quality of vintage 2009 were right on the mark. The two main reasons were firstly, specific
finest ever and impressive dry whites were made by Smith Haut Lafite, Pape Clement and
to the vintage, the weather patterns which prevailed through the year and specifically
Domaine de Chevalier amongst others in Pessac Leognan.
during the crucial months leading up to the harvest. This period was on average two degrees warmer than usual but avoided the excessive heat levels of the “heat wave”
Before the Bordeaux campaign had even begun, some armchair pundits had already
vintage of 2003. The result was that the grapes achieved optimum ripeness with thick
begun to moan about high levels of alcohol and terms such as “Parkerisation” and
skins and sugars, tannins and acids in balance. Alcohol levels were high for Bordeaux, but
“California style” have been bandied about in the blogosphere. These poor souls were
were still in harmony with the other crucial elements.
clearly not in Bordeaux to taste the wines for themselves.
The second factor was the comparative financial health of most of the top chateaux,
The United States and some other traditional En-Primeur markets decided to sit this one
compared with a few decades ago. Properties which used to perform leaf thinning once
out but demand in Europe, particularly the UK, has been phenomenal despite the high
a year can now afford the labour to do this more frequently. This process allows air
prices. Rumour has it that several cases
to circulate more easily around the grapes, reducing the risk of rot as well as allowing
will eventually arrive in some of the most
exposure to sunshine. Stricter selections in the cellar mean that only the healthiest grapes
distinguished cellars in Hong Kong.
make it into the top wines. Rejecting grapes clearly means less wine, but the benefit in terms of the quality and the price that can be achieved are very obvious and most of the Bordeaux chateaux with aspirations to quality are taking this route.
For information regarding En-Primeur, please visit http://www.altayawines.com/
A week in Bordeaux tasting the En-Primeur wines of the 2009 vintage was an
en/enprimeur09.php
exhausting but exhilarating experience. The crunch of gravel underfoot in the driveways of exquisite chateaux, the excited chatter in a myriad of different tongues, and the eager exchange of opinions and information over dinner in the evening were all part of the atmosphere and one had to remind oneself frequently that there was a price to be paid for all this sybaritic indulgence when prices were announced and the pressure was on to shift some cases. S eptember 2010 • Vol 25 • No 8
17
ENVIRONMENT
Building a low-carbon economy By Ian Cruz
China
has had a rapid rise to economic prominence in the past few years, and as
as trends for developing a low-carbon economy, each bringing their own different expertise
such, will help define attributes of global corporate culture in the future. As with many developing
and perspective to the forum. This includes implementing carbon trading and financing, as
economies, priorities very much revolved around building and accumulating wealth. However
well as techniques for low-carbon concepts in industrial design and production.
with China’s rapid rise to economic success, has also come a newfound corporate responsibility and awareness of environmental factors when it comes to furthering economic development.
Another focus for the exhibition is the showcase of low-carbon products and technologies. A two thousand square meter area display will be available for local and international
With this sentiment becoming increasingly important to industries and governments world
companies in the energy saving and environmental protection sectors to promote and
wide, the China Council for the Promotion of International Trade (CCPIT) will be hosting
demonstrate the latest new products and technologies.
the China (Guangzhou) International Symposium and Exhibition on Low Carbon Products & Technologies, organized by CCPIT Guangzhou. The event, which will be held at Dong
Ultimately, what the exhibition looks to provide is the immediate interaction between
Fang Hotel on September 20th, 2010, aims to provide a forum for international government
those in the low-carbon field, whether they be entrepreneurs, professionals, academics or
departments, research institutions and enterprises which are involved in policy making, R&D
environmentalists, so they can learn from each other to explore new means of developing
and production regarding low-carbon economies.
strategies which promote a low-carbon economy and to bring these issues to the forefront on economic development on a global level.
The exhibition looks to put emphasis on international cooperation to broaden the vision of respective governments and enterprises by providing an exchange of professional expertise
With China now putting green issues on its economic agenda and leading initiatives such
from organisations from different countries such as the World Wildlife Fund for Nature, the
as these, it can only be a good indicator of how topics such as low-carbon economies
US Department of Energy and the International Business Leaders Forum, as they offer their
are becoming ever more important to organisations on both a local and international level.
interpretations on low-carbon related policies. In addition, various government officials and
Hopefully the success from the China (Guangzhou) International Symposium and Exhibition
departments, along with CEOs from low-carbon enterprises, will be given the opportunity to
on Low Carbon Products & Technologies will only help bolster the efforts to build a greener
share their respective opinions and experiences on prominent environmental topics as well
and low-carbon global economy.
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BUSINESS
Stay cool
conserve power By Graham Cottingham, Director, Airconmiser
Much
has been said about energy conservation in recent years. It’s not that it
The new technology has been proven in site trials to save typically between 40 and 50%
wasn’t relevant before, but now at last, there seems to be a common appreciation of how
of power consumption in air conditioning by using intelligent chip technology to ensure the
rapidly the demand for power is growing and how limited our resources are to meet the
compressor runs for the right amount of time to match the cooling requirement, constantly
demand. In some parts of the world there is already insufficient power to meet demand, or
checking and adjusting according to changes in heat load in the air conditioned room. It
else the cost of delivering power is prohibitive. It’s a fact of life – your power costs, whether
also stabilises room temperature to improve comfort levels and provide a more constant
at home or in business, are on a long term upward trend.
environment for mission critical equipment or perishable goods.
Concerns for the environment have been higher profile too, but experience has shown
This is an exciting breakthrough because if it was used throughout Hong Kong, for
that most people are reluctant to pay for green technology if it doesn’t make financial
example, then even at 30% energy savings, our power consumption would reduce enough
sense in the short term; especially in Asia where the tendency is to demand fairly
to close two medium sized power stations. For businesses, the technology will pay for itself
immediate gratification.
in less than a year – or in high usage scenarios just a matter of months – offering a real step forward on returns on investment for consumers compared to other green technology. It’s
This brings us neatly on to the subject of which solutions are viable. Last month’s summary
gratifying to see a British idea successfully developed and patented in Hong Kong. Now the
of the research of Doctors Josie Close and CK Chau provided an informative insight on this
challenge is to achieve worldwide adoption of these kinds of greener technologies.
matter and it was particularly interesting to see them conclude that technologies capable of retrofitting to existing buildings are the recommended way forward, but note that in most cases, payback periods are (sometimes substantially) longer than five years. If the returns
For further information, please contact Graham Cottingham at (+852) 3752 2664 or
on investment are unattractively low, how can we expect the commercial market to buy
graham.cottingham@airconmiser.com
such products? Businesses are always interested in the most cost effective solutions that will make the biggest impact on a problem. For most buildings, the greater part of the electricity bill comprises of air conditioning, as this alone could be 50-70% of the bill in summer months in Hong Kong and year round in some other countries. In the circumstances, it seems strange that so little has been achieved in power management improvements in air conditioning. True enough, the market has seen the introduction of the invertor drive and VRV models from air conditioner manufacturers, but these have a noticeably higher failure rate than older style machines, are more expensive to buy and to fix, and suffer from other design flaws. There are also a number of shortcomings with conventional air conditioning. One is that it is generally not very effective at responding to changes in heat load. At the same time it must be able to deal with the hottest and most crowded conditions it might encounter. This means that it will be oversized for the conditions it normally encounters but not sufficiently sensitive to the sudden changes in heat load that might occur, for example, when a room fills with people for a meeting or empties again an hour later. The result is that the power hungry compressor of the air conditioner runs more than it needs to for the real cooling requirements most of the time. Another problem people complain of is the fluctuation in room temperature often experienced, so people constantly undulate between being too hot and too cold. This is both unhealthy and uncomfortable. If you have mission critical equipment or perishable goods in the air conditioned area, the lack of temperature stability introduces other problems. Some years ago a small group of investors and technicians decided to take up the challenge of solving such problems and clubbed together to develop a solution, recognising the untapped market if a reliable solution could be found. After a lot of time and resource had been put into R&D and prototyping, AirconMiser Limited was established last year to patent and market the new technology and, following the confirmation of extensive testing and official certifications, commercial quantities began rolling off the production line earlier this year.
S eptember 2010 • Vol 25 • No 8
19
ENVIRONMENT
Business Benefits of Environmental Engagement
By James Campbell, Head of Global HSBC Climate Partnership Programme, Earthwatch Institute
Not
long ago, the environment and the various ‘issues’ associated with it were
change issues, combined with a learning and development programme which will equip them to
seen as a minority interest for a minority of people, and irrelevant and inappropriate for
return to their places of work more motivated, better informed, and empowered to take actions
business. Comparatively quickly however, the words ‘global warming’, ‘climate change’
which will improve their environmental credibility. In the light of ongoing environmental sensitivity
and ‘sustainability’ have entered corporate culture, and are increasingly moving towards the
– the oil leak in the Gulf of Mexico being a current good example – businesses in environmentally
centre of business strategy.
sensitive areas have learnt that an ongoing organisational commitment to the environment has stood them in good stead – in good times and in bad.
Whilst this has partially come about due to pressure from interested investors, shareholders and customers, and internally from employees, increasingly a key driver for business leaders
Increasingly, businesses look to quantify a return on investment, and the relatively new Social
has been the recognition that engaging and embracing environmental issues positively and
Return on Investment (SROI) is an interesting demonstration of value. This model aims to
enthusiastically can bring significant business benefits.
quantify financially the total return on investment, including placing a notional (but carefully calculated) monetary value on social and community benefits which accrue from such
Take, for example, a recent programme commissioned by Starbucks, to examine the
policies. For example, a business investing in an environmental programme should be able to
sustainability of their coffee supply chain from one region – Costa Rica. An investment
demonstrate value against staff recruitment and retention (for those involved in the initiative), or
which proved popular with staff and customers, possibly viewed with more hesitation by
against changes within the business itself. Often however, the wider benefits to communities
investors and senior management, has produced interesting results. A review of production
and individuals outside the organisation are much harder to quantify, other than by notional ‘Case
methods and associated research has resulted in a reduction in artificial fertiliser use, an
Studies’. The SROI model allows a monetary value to be placed on community/social benefits –
increase in berry size (of 25%) produced, increased coffee yields, decreased production
for example, the savings made by keeping individuals/communities in sustainable employment,
costs and increased income for coffee farmers. The result has been a win/win situation
or reductions in public sector interventions – and to express these financially. Consequently
for Starbucks, who have achieved improved core margins in a key business area, whilst
a business can more clearly and accurately articulate the benefits from an investment in an
facilitating sustained environmental improvement to a rural agricultural community. With
environmental programme in financial terms – directly and indirectly – which is often extremely
senior management and investors now fully supportive, having seen the demonstrable
beneficial to decision-makers, senior management and shareholders/investors.
business benefits, Starbucks are investigating rolling out similar environmental initiatives in other areas of their global coffee production.
A currently popular model for engagement in the Asia Pacific sees a collaboration between a global NGO – for example, WWF or Earthwatch – and a local environmental/conservation
Increasingly, environmental policies are examined by commentators and analysts looking
organisation, bringing global perspective and experience allied to particular local issues
for evidence of institutional commitment to the broader environment, and to integrate such
and needs. In this way, for example, WWF
policies through an organisation, on the basis that businesses which can demonstrate this
has partnered with the Smithsonian Tropical
approach are likely to be more competitive than equivalent businesses which cannot. A
R e s e a rc h I n s t i t u t e i n a f o re s t - re l a t e d
further factor, evidenced by a number of HR surveys globally, indicates that in a competitive
programme in Papua New-Guinea, whilst
market for the best employees (and most particularly for the brightest graduates and
Earthwatch is working with local NGOs
younger employees), a key factor in their choice of employer is the policy and standpoint of
in Hong Kong to connect employees of a
the organisation towards environmental issues.
multi-national financial business with local environmental projects.
A multi-national oil company, for example, is investing widely in a number of environmental
Over a short period of time – perhaps twenty years – environmental issues are now at the
initiatives with a portfolio of NGOs, addressing
forefront of political, economic and social agendas. Businesses and organisations which
a range of sustainability projects. In South-
embrace the opportunities presented by this shift positively and pro-actively will surely reap
East Asia, one of these involves company
the rewards in financial, economic and social returns on investment.
employees and UN employees working together on a joint programme involving direct research (with trained scientists) into climate
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For further information, please contact Susie Newbigging at snewbigging@earthwatch.org.uk
INVESTING
To Err is Human What causes investment mistakes - and how you can avoid the pitfalls others make By Philippa Huckle, CEO, The Philippa Huckle Group
In
400BC, the Greek philosopher Plato described human behaviour as a chariot driven
the problem: emotionally, humans get excited when prices go up (clamouring to buy), and
by two horses: reason and passion. Decisions based on reason are cognitive, involving
scared and despondent when prices go down (desperate to sell). Plato’s chariot overturns
logic and careful thought (like when we’re solving a maths equation); the deliberate
itself: passion and reason collide.
weighing up of pros and cons of the options before us. Decisions based on passion have a psychological basis and are the result of a mix of instincts and emotions (we jump when we’re startled).
Natural Highs And Lows Thanks to neuroscience, we’ve learned that the emotions we experience are actually caused by chemicals released in our brain. One of these is dopamine. Whenever you do
These days neuroscientists can actually film the brain in action. They’ve found that the brain uses two completely separate types of brain activity to make decisions - which are, in fact, Plato’s reason and passion happening live. Yes, Plato was right. Different parts of our brain are active when we think, and other parts when we feel. In investing, the cognitive methodologies for successful investing have been understood for three centuries. They’re logical and straightforward: allocate your capital into a well thought out asset allocation, carefully diversify, and then systematically rebalance your portfolio as its weightings naturally shift.
something that worked, your brain squeezes out a shot of dopamine. A dopamine rush feels delicious - it’s that feeling you get right after a success, and because dopamine feels so good, it makes you want to do again whatever it was that you just did, in the hopes of getting that exhilarating feeling once more. So if you’ve bought an investment that just went up, you’ll feel a surge of dopamine, which will make you feel like..... buying more! Dopamine’s a well-intentioned drug: it’ s trying to be a kind of success driver. The problem is that financial markets eventually move in cycles. Thinking with the reason part of your brain, you’d try to buy when an asset’s price is low, and sell it higher. Unfortunately, you don’t get any dopamine
To Err Is Human
releases when a price is low or falling - you only get that turbocharged “buy!”
While this logic makes sense to most people, for some reason investors tend to break these
instruction when prices are rising. In the cyclical world of financial markets, passion
rules, as shown time and time again over the years by DALBAR’s “Quantitative Analysis
and reason collide.
of Investor Behaviour” analysis. The reality is that, on average, investors have for years substantially underperformed in the markets they invest in. This underperformance is not due to a lack of intelligence, but because investment decisions get influenced (and twisted) by human emotions and instincts (Plato’s “Passion”).
Shifting Your Decisions From Passion To Reason There are things you can do to begin the process of shifting your investment decision processes from passion back to reason. Firstly, you can use a set of tools, which force you to think cognitively, instead of responding emotionally or instinctively (like The Investment
Primal Instincts
Decision Quadrant™). Secondly, and crucially, you should be implementing sensible
There is a reason that we humans have emotions – essentially they’re a survival tool, acting
portfolio management techniques to force you to sell high and buy low, using a systematic
as an important internal behaviour gauge as to whether what we’re doing is good or bad
rebalancing policy across a properly diversified portfolio.
for us (e.g. the feeling of guilt is your brain sending you a signal that you shouldn’t be doing whatever it is that’s making you feel guilty).
By understanding what is happening in our minds when we are making decisions we have more control over how we choose to respond. Avoiding psychological pitfalls means you’ll
Emotions are primal calls to actions in response to possible opportunities and threats.
make fewer investment mistakes - so you’ll ultimately end up worth more money.
They’re triggered by a sudden change in our environment: a caveman would jump hearing a sudden rustling in the bush; thousands of years later we react the same startled way to sudden market movements.
Philippa Huckle is CEO of The Philippa Huckle Group, an investment advisory firm which manages the investment portfolios of successful Hong Kong individuals. Philippa is an
22
In order to make money on an investment, we need to buy when it’s cheap, so we can sell it
international authority on Behavioral Finance and in 2009 was awarded Hong Kong’s “Most
later when its price has gone up. Of course, cognitively, everybody understands this. Here’s
Extraordinary Woman in Finance”.
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NEWS
North East expert to advise Hong Kong business on tackling youth unemployment An expert from the North East Apprenticeship Company (NEAC) was in Hong Kong this past July urging employers to adopt UK style apprenticeships in an effort to curb the Chinese region’s chronic youth unemployment problem. Paul Champion, Managing Director of the NEAC, had been invited by the Hong Kong government and the British Chamber of Commerce in Hong Kong to provide advice to local business leaders, government officials, and vocational and training councils. As Hong Kong is blighted by one of the highest levels of youth unemployment in the Asia Pacific, organizations like the British Chamber of Commerce and are looking to the UK for a solution, where the re-emergence of apprenticeships is being seen as vital in supporting the training needs of employers while equipping young people with the skills required for a career. Paul will explain how the NEAC is working towards placing more than 400 apprentices across the UK’s North East region annually through partnerships between young people and employers. Drawing on his own experience, he will advise employers and those involved in training throughout Hong Kong to remove any barriers that might have discouraged them from hiring in the past.
McKinney Rogers opens Hong Kong office McKinney Rogers, the business performance advisory firm, is continuing its drive to
ipac introduces Qualified Recognised Overseas Pension Schemes
become a global leader in business execution with the opening of an office in Hong Kong. The new office will serve as the base for Greater China operations with further
UK pension owners residing in Hong Kong and Singapore and do not intend to return to the
plans to open an office in Shanghai later this year. The Hong Kong opening will be
UK, can now turn to ipac for advice on transferring their UK pension benefits abroad. ipac
McKinney Rogers’ 14 office worldwide and is a further milestone in the company’s
financial planning recently announced that financial advice on Guernseey-based Qualified
rapid growth in recent years.
Recognised Overseas Pension Schemes (QROPS) is now available in its Hong Kong and
th
Singapore offices. The Hong Kong opening comes just as McKinney Rogers International Ltd’s recent accolade of winning the prestigious Queen’s Award for Enterprise and International
A QROPS is an overseas pension scheme that is recognised by and registered with Her
Trade 2010 this past July. Selected on the recommendation of the Prime Minister,
Majesty’s Revenue and Customs (HMRC) to receive transfers from UK pension schemes.
winners of the International Trade award are recognised for achieving exceptional
Members of this scheme can take advantage of reduced taxation and increased flexibility in
business performance internationally.
inheritance and succession planning.
Paul Orchard Lisle, the Deputy Lieutenant for Westminster and official representative
“Expanding our scope of advice in this area will help us address the needs of the UK
of Her Majesty The Queen made an official presentation at the McKinney Rogers Head
community overseas. It covers anyone who has worked in the UK and was part of an
Office in London on Monday 19th July. In addition, the award was presented to two
employer’s pension scheme or contributed to a personal pension plan. The scheme will
senior representatives of McKinney Rogers by Her Majesty the Queen at an official
benefit those who wish to retire overseas and do not intend to return to the UK,” said Gary
ceremony at Buckingham Palace later that day.
Harvey, CEO, ipac Wealth Management Asia.
B.S.C. Group celebrates its th 40 Ruby Anniversary
The Executive Centre now also on Level 5, Two Exchange Square
Local conglomerate, B.S.C. Group, celebrated its 40th Ruby Anniversary on 16th July, 2010, with a cocktail reception held at the Grand Ballroom of the Four Seasons Hotel Hong Kong.
The Executive Centre, Asia’s leading premium serviced office operator, has launched a brand new Conference Centre on Level 5, Two Exchange Square, Hong Kong. This marks
Over 600 business associates, clients, bankers, media, friends and overseas principals
The Executive Centre’s third facility following the opening on Levels 7 & 8 of the same
of B.S.C. joined Mr. William Lau, Chairman and Managing Director of B.S.C. Group
establishment last year.
Limited, at the celebration of this momentous and joyful occasion. The new state-of-the-art facilities feature extensive conference facilities to accommodate B.S.C.’s Global Vision has steered the Group into a multi-dimensional corporation with
events from 15 to 120 people, as well as The Executive Centre’s first Virtual Office Lounge
1,000 staff and partners around the globe. B.S.C.’s future is underpinned by its core
which provides dedicated space and assistant support to Virtual Office clients.
values of quality, innovation and team building. “A New Way A New Global Vision” is the new mantra for B.S.C. as it moves forward and faces changes, challenges and
Members of British Chamber of Commerce are cordially invited to utilize the new facilities and
opportunities in and beyond the 21st Century.
services and to benefit from exclusive privilege rates. For more information please direct your enquiry to Pratiwi Menzies on +852 2293 2314 or Pratiwi_Menzies@executivecentre.com.
24
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NEWS/NEW APPOINTMENTS
HSBC presents exhibition to celebrate the 25th anniversary of HSBC main building Last August, HSBC put on ‘Building for the Future: HSBC Main Building’, an exhibition celebrating the 25th anniversary of the completion of the iconic Hong Kong landmark. Held at the ground plaza of HSBC Main Building in Central, the exhibition traced the history of the 1 Queen’s Road Central site, home of the bank in Hong Kong since its foundation in 1865. The exhibition also detailed the design and construction of HSBC’s fourth Hong Kong headquarters through archival photographs and documentary footage. The bank’s future plans for the building were also outlined in the exhibition. Lord Norman Foster, architect of HSBC Main Building, on the 25th anniversary of the building’s completion, said: “The Hongkong Bank is a statement of confidence – created without compromise. Our brief was for nothing less than ‘the best bank building in the world’. Through a process of questioning and challenging, we virtually reinvented the office tower – in humanistic as well as organisational and urban terms. From the outset, the bank placed a high priority on flexibility. Interestingly, 25 years on, it attributes a measure of its continued strength as a company to the ability to reconfigure the building to suit its changing needs.”
FTI Consulting, Inc completes acquisition of FS Asia Advisory Limited FTI Consulting, Inc, the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today announced that it has completed its previously announced acquisition of FS Asia Advisory Limited (formerly Ferrier Hodgson Hong Kong Group). Founded in 1985 and with operations in Hong Kong, Shanghai, Singapore and Manila, FS Asia Advisory (FS) is a leading provider of corporate finance, restructuring and turnaround, corporate advisory and corporate recovery services in Asia. The acquisition significantly expands FTI’s presence and breadth of capabilities in Asia, adding 130 professionals to FTI in the region. Going forward, FS will operate as FTI Consulting, and their practice, including Hong Kong, Shanghai, Philippines and a new office in Singapore, will be integrated into FTI’s market-leading Corporate Finance / Restructuring segment to become the only advisory firm in its field to offer complete coverage of the Americas, Europe and Asia.
Compass Offices, a Hong Kong based serviced office
addition to his MSc in Marketing and an MBA from Manchester Business School, Chris
provider, is pleased to announce the appointment of
has over 20 years of international sales and marketing experience gained in the UK,
Alastair Gledhill as Sales Director. Working closely with
Americas and the Middle East and has been based in Hong Kong for the last 2 years.
Andrew Chung and Lachlan Sloan, Alastair will oversee
Alastair Gledhill
sales and business development to ensure Compass
Chris’s appointment marks a significant step forward for Carey in Asia, continuing the
Offices achieves the ongoing challenges of setting new
development of new business, with the objective of Hong Kong becoming the hub for
industry standards.
business throughout the entire region.
Alastair will be central to the development of start-up serviced office providers’ rapid growth plans across Asia
HSBC Global Asset Management has appointed Sten
Pacific. Educated in the UK and moved to Hong Kong in 2004, he is a passionate sailor
Ankarcrona as Head of Sovereigns and Supranationals,
and spends as much time on the water as possible.
Asia-Pacific. Based in Singapore, Sten will have overall responsibility for developing the sovereign and supranational
“We are delighted to have someone of Alastair’s calibre onboard,” Lachlan Sloan,
business in the region.
Group Director for Compass Offices said. “Through bringing both a strong strategic mind and the extensive industry experience to Compass Offices, Alastair will help us
Sten brings with him over 20 years of industry experience.
ensure we continue to offer our clients new and innovative products.”
He will relocate from Stockholm where he was Managing
Sten Ankarcrona
Director of HSBC Global Asset Management for the Nordic region, responsible for developing institutional
Chris Parker has been appointed as the Regional Sales
including government, corporate, pension and third-party distribution business. Prior
Director for Carey International based in Hong Kong and
to joining HSBC in 2004, Sten held various sales and investment positions at a number
is responsible for all business development in the region.
of financial institutions in the US and Sweden. He holds a BA degree in International
Carey is the world’s leading chauffeur drive and ground
Relations from Bucknell University in Pennsylvania, USA.
transportation company, offering a full range of vehicles from executive cars through to full size coaches to many
Rudolf Apenbrink, Chief Executive Officer of HSBC Global Asset Management, Asia-
major global clients.
Pacific said, “The Sovereign and Quasi-sovereign entities, which make up the majority
Chris Parker
of institutional assets in Asia-Pacific, are strategically critical to growing our regional
Chris is leading the business development across the
institutional business. We will continue to strengthen our sovereigns and supranationals
Asia Pacific region, with a particular focus on the Hong Kong and Singapore markets. In
franchise in partnership with the local offices in the region.”
S eptember 2010 • Vol 25 • No 8
25
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1 Queen’s Road Central, Hong Kong
Turnkey Consulting Limited Director
Banking
International Risk Ltd
Tel
3583 0150
Rob Morris
Fax
9860 7030
Senior Managing Director
tony@turnkeyconsulting.net
Tel
2501 5233
Room 1101-1102, 11/F
Fax
2501 5237
Prosperity Center, 25 Chong Yip Street
rob.morris@fticonsulting.com
Kwun Tong, Kowloon, Hong Kong
Room 1009-18, Shui On Centre
Consultancy
6-8 Harbour Road, Wanchai, Hong Kong Risk Management
Prudential Corporation Asia Lyndsey Wylie Regional Director, Employee Relations Tel
6056 8130
lyndsey.j.wylie@prudential.com 13/F, One International Finance Centre 1 Harbour View Street, Central Hong Kong Financial Services
26
2880 5085
w w w.britcha m.com
Hong Kong
SHAKEN NOT STIRRED
Shaken Not Stirred July 2010 Frank van Bemmel (Regus), Andrew Harrison, Sharon Harrison (FP Marine Risk)
Alison Asome (Ipac), Michael Lucas (ICS Trust), Mahdi Motamedi (Arkadin), Sheila Dickinson (Ipac) Rachel Waterfield (The Henley Group), Freya Simpson Giles (Giles Publications), Jenny Pang (Giles Publications)
Steffan Drayton (Handpicked NZ), Jason Weatherhead (ICS Trust), Graham Price Dovenia Chow (The British Chamber of Commerce in Hong Kong), Ruth Benny (The Hong Kong Polytechnic University)
Kristine Stewart (The Hong Kong Institute of Etiquette), Patricia Muir (Handpicked NZ), Malcolm Pratt (Unigroup Worldwide)
Carrie So (Rite Clik), Jens Boecher (Compass Offices)
Paul Errington (Connaught Finance Investments), Chris Parker (Carey)
Tabitha Logan (Maritime Capital Shipping), Steffan Drayton (Handpicked NZ) Malcolm Pratt (Unigroup Worldwide), Mark Millar (MPower Associates), Ruth Benny (The Hong Kong Polytechnic University)
Kitty Chan (RBS Coutts), Jason Weatherhead (ICS Trust)
Cameron Vine (Mizuho), Ian Smith (ThyssenKrupp Elevator) Jo Lodder (Absolute Real Estate), Katie O’ Shea, Rachel Waterfield (The Henley Group), Bryan Lunt (yooPhuket.com)
Valtyr Saevarsson (I-do Invest), Mabel Wong (THSS Group), Edward Lee (Cardinalasia Consulting)
Rainbow Wong (Compass Offices), Amine Loukia (AGS Four Winds)
Alison Asome (Ipac), Matthew Lloyd (Professional Wills), Tabitha Logan (Maritime Capital Shipping), Kristine Stewart (The Hong Kong Institute of Etiquette)
Christopher Hammerbeck (The British Chamber of Commerce in Hong Kong)
S eptember 2010 • Vol 25 • No 8
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