ENTREPRENEURSHIP - Factors for success

June 11, 2013 12:13 am

Throw away the suit and know execution matters

By Doug Monro

I have five top tips for people thinking of starting their own business.

First, don’t do it! If you do, you’ll be letting yourself in for an immense amount of unrewarded hard graft, a series of failures and the need to keep bouncing back a thousand times when things don’t work.

Next, people matter. Surround yourself with really great people who believe in what you are doing and whom you trust and enjoy working with. Treat them well – and that includes investors.Burning yourself out without knowing if it will ever pay off is certainly not for everyone. If you ignore me and do it anyway, then give it your all. If you start a business halfheartedly, you will not succeed.

Second, it is important to understand your own risk profile. When is the right time for you to a start a company? What financial and personal risk can you afford to take? Do you really know your market? In my case I had corporate experience, an MBA and start-up experience before becoming a founder, so I learnt on someone else’s dime.

Fourth, don’t forget that execution matters. Even if you have five competitors doing the same thing, you can still win if you execute better than them. Luck has nothing to do with it. Spend less time at conferences and coffee mornings, and put more into building and selling a great product. Test, learn, get feedback and iterate fast.

Finally, never wear a suit if you can help it. People who are more concerned about dress code than substance are not worth working with anyway.

Once these rules are established, you will find the UK is broadly entrepreneur friendly.

We have a decent education system, good infrastructure and a flexible labour market. Culturally, we are not as risk hungry as the US, but that is changing.

We now have celebrity entrepreneurs as role models, and even television shows promoting start-up businesses, for all their flaws. We have tax breaks for company founders, such as Entrepreneurs’ Relief, as well as for investors, such as the Enterprise Initiative Scheme.

In the consumer internet sector where Adzuna operates, the UK does not have the history and concentration of start-ups that have developed in Silicon Valley over the past 30 years. But we do have other advantages, including a diverse culture and workforce, and access to London’s media and financial services expertise. For global businesses, London is still the best place to be headquartered.

There is, however, always more the government can do, particularly to reduce the administrative burden on start-ups and their employees. The requirements of Companies House and HMRC remain labyrinthine even to an experienced business manager and qualified accountant like me. What is needed is not rocket science: get everything online, put it in layman’s terms, ask for things only once and only those that are needed, and simplify them.

On taxation, payroll tax breaks to get young businesses going or incentives for employees to profit from stock or options in companies they help create are always welcome.

It is time to tax global corporations properly and challenge their transfer pricing schemes. We need to create a level playing field for all businesses operating in the UK, irrespective of where they are based.

The government should also sort out the banking system to create real competition and customer service, train more computer scientists to fill the talent gap and make the London markets more attractive for technology initial public offerings, to stop us selling so many great British businesses to big US corporations who do not pay UK taxes anyway.

SABAH PORTS CONTAINER TERMINAL (SBCP) @ KOTA KINABALU

Sapangar Bay Container Port (SBCP) is strategically located along the busy shipping routes between the Far East and Europe.  Plans are underway to rationalize the port operations statewide through hubbing to create economies of scale.  SBCP, which has taken over the container operations from Kota Kinabalu Port, is positioned as the premier transhipment hub for the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).  A port of international standing, SBCP boasts of state-of-the-art facilities, the ability to handle more container volume, more efficient and effective operations adn greater competitive freight charges.

Features :

Berthing Facilities
• 500 meter long (outer berth) and 400 meter long (inner berth)
• 12 meter water depth alongside
• capability to handle container vessels of up to 45,000 DWT

Storage Facilities
• Back-up area of 22.5 hectares
• A 15 hectares container stacking area
• A 4,500 m2 Container Freight Station
• Maximum annual throughput of 500,000 Teus.

Cargo Handling Facilities
• State-of-the-art handling facilities including Gantry Cranes, Mobile Harbour Cranes, Reach Stackers, Rubber-Tyred Gantries, Straddle Carriers, Empty Container Handlers, Multi Trailers and Terminal Tractors.

MALAYSIA Economic Growth

MIER set to cut economic growth forecast

Posted on 10 July 2013 - 05:37am

Izwan Idris
sunbiz@thesundaily.com

KUALA LUMPUR (July 10, 2013): Malaysian Institute of Economic Research (MIER) is set to revise its initial economic growth forecast for 2013 at a mid-year review next month on slumping exports and slower private consumption.

The think tank had in January projected that the Malaysian economy will expand 5.6% this year.

"Our export performance in recent months is a major concern,'' executive director Dr Zakariah Abdul Rashid said.

"It would be very difficult for Malaysia to achieve the targeted growth this year if exports continue to shrink,'' he told reporters when met at a conference yesterday.

Zakariah said the growth target would probably be lowered next month after reviewing the country's performance in the first half of the year.

He also said that the latest round of lending curbs by Bank Negara Malaysia announced last Friday would also have a "negative impact" on private consumption.

Exports in May slumped 5.8% from a year ago, worst than what most economists had expected as Malaysian exporters continued to struggle against weak global demand and softer commodity prices.

CIMB Research in a note last Friday predicts that exports growth to remain "soft" until August this year on weak external factors and seasonal slowdown during Ramadan fasting month, which starts today.

In his presentation yesterday, Zakariah noted that one factor that is holding back exports is the lack of "domestic value added" contents to products that are shipped from Malaysia.

"Malaysia is still poor in generating value,'' he said when comparing the export value of products shipped from countries such as Japan, South Korea and Poland.

Manufactured goods accounted for about 75% of Malaysia's total exports. This underlines the importance of the manufacturing sector to our economic growth.

One analysis suggests that Malaysia is still trapped in what experts called a "factory economy" situation. To move up the ladder to what is known as "headquarters economy,'' Malaysian firms need to develop ownership advantages such as indigenous technology that can be exported.

So what is hindering Malaysia's quest to become an exporter of innovation?

One expert pointed out the so called "flexible policy" on foreign workers, especially in the manufacturing sector as one of the stumbling blocks in moving up the value chain.

"This peculiar feature enables firms to hire and fire workers to manage volatility to maintain local equilibrium and also make manufacturers more reluctant to take the risky innovation route,'' said Professor Dr Tham Siew Yean, the deputy director at Institute of Malaysian and International Studies.

She said that Malaysia cannot afford to lose out in the manufacturing industry and called for the deepening industrialisation of the sector.

Tham highlighted the need to attract "the right type" of foreign direct investment into the sector and promote the development of human capital to encourage productivity growth in the manufacturing, as well as in the service sector.

"Whatever ails the manufacturing sector is also a constraint for the service sector,'' she said.

Understanding China Market

USA Today
9 most popular USA brands sold in China
Mike Sauter, 24/7 Wall St.6:01 a.m. EDT May 18, 2013

By 2030, roughly two-thirds of the world's middle class will be in the Asia Pacific region, largely in China, according to a report by Ernst & Young. Currently at around 150 million people, the Chinese middle class is expected to reach 1 billion.

Representing a $250 billion market for American companies today, according to estimates of the U.S.-China Business Council, iconic and newly forged brands alike are looking at enormous opportunity. Some of the nation's biggest brands are already Chinese market leaders in their particular segments. Apple sells more tablets than any competitor in China and Gillette more razors than any other brand. While some of these companies are facing increased competition internationally and from China-based firms, others appear to be pulling away from the pack.

Because China is not an open market, international companies cannot compete in some sectors. According to the U.S.-China Business Council, the Chinese government currently imposes restrictions on about 100 different sectors in both manufacturing and service industries, including much of the agriculture and food production, cloud computing, financial services, petrochemicals and health insurance, among others.

In the sectors that remain more open, companies can strengthen their brand and move ahead of their closest competitors globally. One example of a company capitalizing on its leading position in China is Yum! Brands. The fast-food company is behind global competitors like McDonald's, which had roughly double Yum's worldwide sales in 2012. Nevertheless, Yum! currently has a very strong foothold in China. Its leading chain, KFC, has over 4,200 locations in the country, more than double that of McDonald's, its closest competitor. What's more, the company, despite setbacks, is growing its presence significantly there.

No doubt, the companies that entered the Chinese market planned their foray carefully. But it's also clear that many managed to capitalize on their domestic and international brand dominance outside of China. Companies such as Starbucks, Apple, Nike, and Coca-Cola have thrived in the country — just as they do all over the world. Whether the companies can continue to leverage that value against up-and-coming Chinese brands remains to be seen. Here are the most popular American brands in China today:

1. General Motors:
Auto manufacturer has 14.7% market share, competes against Toyota, Volkswagen
GM has had the largest market share in China of any foreign auto manufacturer going back nearly a decade. The company has access to the Chinese auto market primarily through multiple joint ventures. One of these is Shanghai GM, co-owned with Shanghai Automotive Industry Corp. (SAIC). The venture, 50% owned by GM, sells Chevrolet, Buick, and Cadillac models. According to GM China, the company and its partners sold a total of more than 2.8 million cars in 2012 vs. the 2.6 million cars GM sold in the U.S. last year. Recently, GM announced it was building a $1.3 billion Cadillac plant in China to boost luxury sales.

2. Apple:
PC and gadget maker has 83% market share, competes against Samsung, Microsoft
The maker of iPads and iPhones dominates the tablet market in the world's most populous country. Umeng Analytics Platform reported that in the last quarter of 2012, Apple's iPad and iPad mini accounted for 83% of all tablet sales. Several of Apple's major suppliers operate in China, including Foxconn, which has been criticized for years for its poor working conditions. Developments in the Chinese operations of the company's suppliers are often used as fodder for speculation about the timing of Apple product releases. Most recently, plans by Apple supplier Pegatron to ramp up hiring in China by 40% have fueled rumors about a low-cost iPhone.

3. Nike:
Shoe and sportswear apparel maker has 12.1% market share, competes against Adidas, Reebok
At the end of 2012, Nike still had the largest sportswear market share of any company in China, somewhat of a loose term at 12.1%. But recently, Germany's Adidas has also emerged as a major player in China, picking up market share despite the efforts of Chinese brands such as Li-Ning — which recently signed NBA star Dwyane Wade as a representative. Nike's sales and bottom line have benefitted from its popularity in China. In fiscal 2012, Nike's revenue and earnings in its Greater China segment rose by 23% and 17%, respectively, from the year before, totaling over $2.5 billion and $900 million, respectively. Nike has also had to deal with the differences and problems of operating in China. Michael Jordan, who partners with Nike to market its Jordan Brand sneakers, has accused Chinese company Qiaodan Sports Co. of using his name without his permission.

4. Starbucks:
Coffee producer and retailer has 61% market share, competes against McDonald's, Pacific Coffee
The world's largest coffee retailer opened its first store in mainland China in Beijing in 1998. At the last annual shareholders meeting, according to the China Post, the company has over 800 locations in nearly 60 cities in the country. In the release of the company's fiscal 2012 report, CEO Howard Schultz said, "It's no doubt that one day China will become our second-largest market after the U.S. and it's possible that, over many years, potentially the largest one." Starbucks plans to more than double its headcount in the Asia Pacific region as a whole the next five years to more than 40,000. According to the China Post, however, Starbucks' presence has diminished somewhat, and Chinese companies like Pacific Coffee are setting their sights on the No. 1 coffee retailer spot.

5. Microsoft Windows:
The PC software maker has 91% market share, competes against Canonical (Kylin), Apple, Google
Microsoft has a commanding market share in desktop operating systems in China, according to NetMarketshare. However, the company may face competition in the future, threatening its massive lead in software sales. The Chinese government has worked on an operating system with software firm Canonical. The new OS, called Kylin, was released in April. The BBC noted that the move is regarded as "an attempt by China to wean its IT sector off Western software in favor of more home-grown alternatives." Microsoft has pushed its Surface tablet hard in China, offering it there even before the U.S. However, the company has been criticized for not providing a two-year warranty for the tablet.

6. KFC:
Fast-food chain has dominant market share with 4,260 stores, competes against McDonald's, Subway, Wendy's
the Yum! Brands-owned Kentucky Fried Chicken chain of fast-food restaurants is by far the largest fast-food company in China. Last year, Yum! opened 560 new KFC restaurants there. It plans on opening another 700 restaurants in the coming year to add to the 4,260 KFC stores it had at the end of the fiscal year. Even without the new stores it plans to add, KFC already has more than double the amount of stores of its closest competitor, McDonald's, which has roughly 2,000 stores, according to the Guardian. Aside from the 560 KFCs, most of the remaining stores opening were Pizza Huts. According to Yum!, the China market accounted for 42% of its KFC segment's profit in 2012. The company suffered a setback recently after Chinese food regulators launched an investigation into its poultry supply following media allegations of excessive use of antibiotics and hormones.

7. Gillette:
Shaver and personal products producer has 70% market share (worldwide), competes against Schick
Gillette entered China in 1992, when it was its own company, by joining forces with the Shanghai Razor Blade Factory. Currently, Gillette holds a 70% market share worldwide in men's grooming, as 800 million people use its products each day. Gillette is just one of the products made by Procter & Gamble that dominate the Chinese market place, with other market leaders that include Safeguard, Olay, Pampers and Tide. Between 2002 and 2012, P&G's net sales in China grew by an average 17% annually. The company earned approximately $2 billion in revenue from China in 2012. With Gillette way ahead worldwide, competitors are looking to narrow the gap. Energizer-owned Schick has recently teamed up with Unilever-owned Axe to create Axe razors for the Chinese market.

8. Coca-Cola:
Soft drink producer has 16.6% market share, competes against Pepsi
Euromonitor International says market leader Coca-Cola's soft-drink market share in China was 16.6% in 2012 vs. rival PepsiCo with 5.1% share in second place. In the first quarter of 2013, Coca-Cola, which includes Coke, Sprite and Fanta, reported that volume sales in the country rose by a mere 1% compared to the same period last year. This weakness, blamed by a slowdown in China's economy, is expected to continue. "As we look ahead to the next six months, it is reasonable to expect that China's ongoing economic slowdown may have a short-term effect on our industry and on our business," CEO Muhtar Kent said on the most recent company earnings report call with investors and analysts. In May, Coca-Cola announced plans to invest an additional $4 billion expanding its footprint in China. The company has 42 plants around the country and employs approximately 50,000 workers. A Coca-Cola executive in China, Bai Changbo, told Xinhua news agency that the average person in China drinks 39 bottles of Coke a year, well below the 400 bottles annually consumed on average by Americans.

9. Intel:
Semiconductor manufacturer has 85.2% market share, competes against Advanced Micro Devices, Samsung
As of the first quarter of 2013, Intel had a whopping 85.2% market share of PC semiconductor chips globally. Lenovo, which runs on Intel chips, currently has a nearly 40% market share in China for PCs. Lenovo accounted for 11% of Intel's revenue in 2012. Also, 18% of Intel's revenue came from Hewlett-Packard and 14% from Dell, both of which have a sizable presence in China's PC market. However, Intel could be having problems in the future as more people move away from personal computers in favor of smartphones and tablets. Of all semiconductor sales, which includes those used for tablets and smartphones, Intel had a worldwide leading market share of 15.7% compared to Samsung's 10.1%. But Samsung's revenue rose 6.7%, compared to Intel's 2.4% decline.

SHANGHAI PORT KEEPS ON ROLLING

Shanghai throughput up for third straight month
                
Shanghai Port, the world's busiest container port, saw its container volume rise 7.6 percent in November from a year earlier, the third straight month of gains, data issued by the port's operator showed, reported Reuters.Container throughput reached 2.82 million TEUs, up from 2.72 million in October. The year-on-year increase for the month compared with a rise of 1.4 percent in October.Economists polled by Reuters expect annual export growth to slow to nine percent from a rise of 11.6 percent in October, while annual imports growth are seen easing to two percent last month from October's 2.4 percent increase.

THE RISE OF SHENZEN PORT

Shenzhen port tipped to overtake HK in 2012 


Shenzhen port is forecast to handle 25 million TEUs this year while 
Hong Kong throughput is likely to be around 23.5 million TEUs



Shenzhen is set to overtake Hong Kong as the world's third-busiest container port this year for the first time ever on an annual basis. 

This comes as total box volumes through Shenzhen's four main facilities have continued to climb despite the downturn in global trade, reported the South China Morning Post. 

By comparison, volumes through Hong Kong have dropped, especially from river trade and barge business. 

Hong Kong is set to handle about 23.2 million TEUs this year, according to Post estimates based on throughput figures between January and October. The full-year estimates take into account the expected slack trade season in November and December. 

Industry observers supported the estimates. Jon Windham, head of the Asian industrials equity research at Barclays in Hong Kong, forecast the port would handle 23.5 million TEUs in 2012. By comparison he thought Shenzhen would pull pass Hong Kong to handle 25 million TEUs. 

Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, added: "Your calculation might be right. [The] forecast is far from good." 

Alan Lee Yiu-kwong, head of the Hong Kong Container Terminal Operators Association, said: "Yes, we are losing out". He said Shenzhen would certainly overtake Hong Kong next year if it failed to do so this year. 

Lee pointed out that Hong Kong had technically lost the No 3 spot for several years because 60 per cent of Hong Kong's container volumes is transhipment cargo. As a result each container is counted twice. 

He said container traffic through Shenzhen, Guangzhou and other south China ports are "practically all direct shipments". This meant each container is only counted once. 

Latest figures from the Port Development Council show Hong Kong handled 19.4 million TEUs in the first 10 months of 2012, down 4.4 per cent compared with the same period last year. 

While container volumes grew by a marginal 0.8 per cent to 14.6 million TEUs at the nine Kwai Chung container terminals between January and October, throughput slumped 17.2 per cent to 4.8 million TEUs at facilities outside Kwai Chung. 

Windham forecast that Shanghai would remain the world's top container port this year, handling 34.9 million TEUs. Singapore would be in the No 2 spot with 31.6 million TEUs. 

A MAJOR PORT LOSING GROUND

Hong Kong losing ground as major port


“The government is now talking about a 2030 master plan. Will this be useful when the 2020 plan is in the rubbish can?" asked Alan Lee Yiu-kwong, head of the Hong Kong Container Terminal Operators Association


A raft of issues ranging from a lack of government support to a lack of facilities and new height restrictions in Kwai Chung are eroding Hong Kong's competitiveness as a top global port, a leading terminal executive said.

Alan Lee Yiu-kwong, head of the Hong Kong Container Terminal Operators Association, outlined seven factors that not only hindered development of the port but were responsible for Hong Kong losing ground to neighbouring Shenzhen, reported the South China Morning Post.

Hong Kong is likely be overtaken this year by Shenzhen as the world's third-busiest container port. Estimates indicate Hong Kong will handle 23.2 million TEUs compared with Shenzhen, which is set to handle 25 million TEUs.

"We are losing competitiveness because of the seven issues I mentioned," said Lee, who represents the five terminal operators at Kwai Chung port, including Hongkong International Terminals, DP World and Modern Terminals.

Explaining the problems, Lee said there was a shortage of back-up land and berths for barges, which caused congestion and disrupted port operations last year.

These shortages are exacerbated by new height restrictions in Kwai Chung that prevent terminal operators from developing the existing container yards, either by building over the yards or clearing the yards of containers to build new logistics facilities.

The restrictions are contained in amendments to the draft Kwai Chung outline zoning plan, which were hotly contested in a Town Planning Board meeting on October 12, although the board rejected making any change to the amendments.

Lee said the government's failure to implement any of the recommendations outlined in the 2020 port master plan that was completed in 2004 was also a part of the problem.

The plan included five initiatives to improve port-operating efficiencies and cross-border connectivity. Lee said the government "is now talking about a 2030 master plan. I ask the question, will this be useful when the 2020 plan is in the rubbish can?"