Europe’s largest clothing retailer eyes China

Spain’s Inditex, Europe’s largest clothing retailer by sales, is looking to expand in China, attracted by the rising spending power of consumers in the fast-growing Asian country.

The firm, whose chains include Zara and Bershka, will focus its growth in Beijing, Shanghai and Hong Kong, Inditex chief executive officer Pablo Isla told an annual shareholders’ meeting last month.

The announcement of the firm’s Chinese expansion plans follows the opening in April of Swedish clothing retailer H M’s first store on the mainland, and underscores the growing appeal of China to international fashion retailers. The Spanish fashion house has not set a specific goal as to the number of new stores it intends to set up in China, where it currently has nine Zara outlets, a spokesman told AFP.

But later this month Inditex will open its first Massimo Dutti store, which stocks smart casual items, in the Chinese territory of Macau, with another outlet set to open in Hong Kong next year, he said.

“I think that China is the next frontier,” said Marian Salzman, chief marketing officer with US-based advertising agency JWT which has studied the Chinese market. “With everyday analysts becoming savvy about the sheer demographic reality of China, there is no retailer of scope without a plan for expansion,” he told AFP.

There will be 220 million households in China’s cities making between 5,000 and 12,500 dollars a year by 2025, compared to 23 million in 2005, international consulting firm McKinsey estimates.

Inditex already faces competition in China from Spain’s Mango, Germany’s C A as well as a raft of local brands such as Hong Kong-based Esprit in addition to H M.

The firm faces a cost disadvantage in China since competitors source a greater proportion of their merchandise from the region, said Matthew Stych, global director for retailing research at London-based market research firm Euromonitor.

“Inditex may have to consider ramping up local production in order to maintain its ability to deliver fast fashion at prices that are competitive with its peers,” he told AFP.

H M, Europe’s second-largest retailer, sources more than 60 percent of its products in Asia, more than half of that from China, compared to 34 percent for Inditex, which has said it has no plans to increase production in the region. Inditex opened its first outlet in Hong Kong in 2004 and set up shop on the mainland two years later, selecting store locations in luxurious shopping areas.

To succeed in China, where the nation’s rising middle class tries to emulate the West’s fashion style, Inditex needs to continue positioning itself as a source of affordable but still pricey fashion, analysts said.

“Young Chinese consumers are very aspirational when it comes to fashion, so the more Inditex differentiates its brands from local cheap clothing the better,” said Stych.

AFP

Sierra Leone looks to shine with unpolished gems

As it pieces together its shattered mining sector after a 10-year civil war fuelled by so-called “blood diamonds,” Sierra Leone is turning attention to processing its uncut gemstones.

For years, the diamond-rich west African country has mined diamonds and exported them raw, but as the industry gradually edges its way up back to pre-war levels, focus is now on “beneficiation” as it is known in the industry.

A new law was recently passed to license and monitor the cutting and polishing of rough diamonds, a gem first mined in the 1930s in Sierra Leone.

“There is no cutting going on at the moment, but the government has adopted a policy to add value to most of our minerals, including diamonds,” Mines Minister Swarray Deen told AFP.

But the plan is not without hurdles.

Sierra Leone’s leading mining consultant, Andrew Kilie, says huge amounts of the stone are required to sustain a cutting and polishing plant. Skilled workers to do the work are also not readily available in the impoverished country rated the second least developed in the world.

“In cutting diamonds you need volumes of stones, and the skills to do it. The skills base is not there,” said Kilie.

He said most of the small-scale producers and alluvial panners who produce around 80 percent of the country’s diamonds are organised into cartels which sell to markets abroad.

Some of the producers are backed by the foreign buyers for whom they have set quotas.

“So to convince the dealers to sell locally is not going to be easy,” said Kilie.

“We are not saying it cannot be done, but it is complicated,” he added.

Government director of mining Alimany Wurie said local exporters have made a pledge to sell to local cutters.

“The availability of diamonds on the market could be one challenge, although exporters have made a commitment to sell to local cutters,” said Wurie.

Increased revenue on government levies and job creation have been the motivating factors behind promoting diamond cutting and polishing.

If polishing takes place inside the country, “it creates employment and results in increased revenue to government,” said Wurie.

Government levies a 3.0-percent tax on all diamonds exports and processed stones fetch a higher value and more revenue.

AFP

Oracle releases 11g Database

Hundreds of orga- nisations in Asia Pacific have tested or participated in previews of the latest release of the world’s most popular database, Oracle Database 11g. With more than 400 features, 15 million test hours, and 36,000 person-months of development, Oracle Database 11g is the most innovative and highest quality software product Oracle has ever announced.

“Although organizations want to drive competitive advantage through innovation, inflexible IT systems have made it difficult to implement changes,” said Roger Scott, vice president, Technology Sales Consulting, Oracle Asia Pacific.

“Oracle Database 11g is designed to help customers innovate faster by reducing time, risk and cost of change; and ultimately get more value from their enterprise information.”

Enterprise Management Associates Senior Analyst Andi Mann added, “IT organisations are constantly dealing with changes - hardware changes, OS changes, software patches and upgrades. Implementing those changes to a production environment is a non-trivial undertaking. Oracle Database 11g’s Real Application Testing is a major step forward in helping enterprises cope with changes to IT environments.”

To help customers get ready, Oracle University kick-started today an intensive 5-day training course on Oracle Database 11g for the Asia Pacific region. From August to December 2007, Oracle will be bringing together industry visionaries, Oracle Executives and business leaders in a series of Executive Forums across Asia Pacific.

These forums will discuss the challenges facing executives and highlight innovations enabled by Oracle Database 11g. Oracle Database is the only database designed for grid computing.

Nippon Sheet Glass to launch India production

Japan’s Nippon Sheet Glass Co. Ltd. plans to build a 15 million euro ($20 million) automotive glass plant in India with British unit Pilkington, targeting Japanese carmakers eyeing climbing local demand.

The news sent shares in the maker of windshields, crystal and soundproof glass up 6.1 per cent to 627 yen on Tuesday, outpacing the Nikkei average , which rose 1.3 per cent.

The plant, to go online in summer 2008 with an initial production of 500,000 windshields a year, will supply windshields to local factories, some to be exported to the U.S. and Europe, spokesman Tetsuya Higaki said.

Nippon Sheet Glass, which bought bigger maker Pilkington in June 2006, is betting on overseas growth in its fight against bigger peer Asahi Glass Co. Ltd. to grab orders from Japanese automakers.

The plant, to be built in the southeastern state of Andhra Pradesh, would be Nippon Sheet Glass’s first in India. Reuters

Japan eyes ending most duties on ASEAN imports

Japan will propose scrapping duties immediately on 90 percent of imports from ASEAN when it holds free trade talks with the regional bloc this week, a report said Tuesday.

But Japan wants to exclude politically sensitive rice from a deal, along with sugar and some other farm products on which Japan imposes duties of several hundred percent, the Nikkei economic daily said.

Japan, a major exporter, has been actively pursuing bilateral trade pacts amid a collapse of global trade negotiations. On Monday, it signed a deal with Indonesia, its sixth with a Southeast Asian country.

Japan is also negotiating for a pact with the 10-member Association of Southeast Asian Nations (ASEAN) as a whole.

Japan is making the proposal as it sees itself as lagging behind China and South Korea in trade deals with ASEAN, the Nikkei said, without identifying its sources.

AFP