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2011 News | 2010 News | 2009 News | 2008 News |
2011 News
We began 2011 in Hong Kong. Since our meetings started in Shenzhen and Guangzhou, we took the ferry from Hong Kong International Airport on Chek Lap Kok Island to Shenzhen.
This is an easy way to enter mainland China. Before reaching Hong Kong immigration, bear right at the signs that say Ferries. After purchasing your ticket, take the escalator down to the train for “Sky Pier.” Here you will find a gate marked for your destination; mine was Sukou Shenzhen. Half an hour later we were going through Chinese immigration in downtown Shenzhen, a city of 14 million.
In Shenzhen we visited two very interesting manufacturing plants. One was a plastics manufacturer who took great pride in his plant. It was obvious that he was not only was ISO 2000 certified but also actually practiced this on a daily basis. His wasn’t like a number of Chinese companies that obtain their certification but then leave out most of the steps and cut their supply chain for cheaper, raw material. They do so to increase their profits or to make a low bid. The roof of this particular plastic plant was most impressive. On it, we saw water cleaning units scrub water from manufacturing operations and air cleaning units purify air used in the plant painting operations. None of these procedures are required by law but the owner was determined to have one of the most advanced manufacturing plants in China.
Our next plant visit was with a company expanding rapidly in Light Emitting Diode (LED) manufacturing. LED’s are used in city street lights, stadium lighting and florescent bulbs. The owners are currently building a new facility for 2,000 workers with a plant and dormitories.
After our China visit, we returned to the United States for two important meetings. First, we met with the U.S. Ambassador to Singapore, David Adelman, and his commercial attaché. A few weeks later, on March 4, we would meet them again in Singapore at the US Asia Pacific Regional Business Summit.
Next, I met with a group of financial advisors exploring ways to aid their clients during this financial climate. Because most small-to-medium-sized companies in the U.S. are not able to find buyers for five to eight years, I emphasized how expanding globally could be beneficial. Since 95 percent of the world’s population lives outside the United States, 60 percent in Asia alone, not only could these companies stay competitive but also demand a higher multiple for their companies when the financial market becomes stronger. Thus, I centered my talk on how these owners could expand globally while mitigating their business and political risk.
Hours after the speech, we were off to Singapore to meet with the U.S. Commercial Services staff for more discussions of how U.S. corporations can begin exporting to Singapore and the Association of Southeast Asia Nations (ASEAN). ASEAN is comprised of Singapore, Thailand, Indonesia, Malaysia, Philippines, Brunei, Myanmar, Cambodia, Laos, and Vietnam. The ASEAN market is twice the size of the United States. Singapore is the 10th largest trading partner of the U.S., even though it is 9,000 miles away. English is the primary language and Singapore ranks second only to Switzerland in protection of intellectual property rights while ranking 1st in the world in the ease of doing business.
After our meetings in Singapore, we traveled to Ho Chi Min City (HCMC or Saigon), Vietnam. Our meetings there centered on the rapidly expanding market for U.S. exports in Vietnam. HCMC is an interesting city of 11 million people and the largest populations of motor scooters in the world. The one question is whether Vietnam is going to be the next Asian Tiger such as Korea or whether it will implode as did the Philippines. Vietnam has many challenges ahead but also has great opportunities. The Communist government has signed the World Trade Agreement (WTO) but has not moved at the great pace that China did.
After Ho Chi Min City we went to Da Nang. This is a city in the process of economic expansion at a remarkable level. We talked with some financial advisors about the size and momentum of this expansion. For miles and miles along China beach to Hoi An, the hotel, villa and golf course expansion is remarkable. Hyatt is developing 3 kilometers, or 2 miles, of beachfront into a Hyatt Regency Resort and Spa and Hyatt Villas for residential sales. Also in process is Raffles of Singapore, Furama Group of Japan and Le Meridien. Sir Colin Montgomery of the UK is developing villas on the ocean and a large golfing complex of 36 holes. Greg Norman of Australia is developing his golf courses and villas along the ocean. This from a town within a few miles of Russian-type Communist housing blocks in horrible disrepair. The speed of these developments is breathtaking.
Our next stop was Xiamen (pronounced Sha-men), China. Xiamen is a mainland coastal city facing Taiwan. Since it is in one of the five Special Economic Zones, the standard of living of Xiamen’s population has improved tremendously. Nominal GDP per capita of Xiamen has doubled from 2001 to 2008. The city has made remarkable progress by having obtained 30 billion U.S. dollars of investment. Thirty-six of the world's top 500 companies, including Dell, Kodak, Coca Cola, Boeing, General Electric, and Honeywell, have invested in over 70 projects in Xiamen.
Finally it is no exaggeration to say that business opportunities abound in the Asian market.
2010 News
I don’t know if you’ve been following the problems across Europe created by the eruption of the Icelandic volcano, Eyjafjallajökull (pronounced ay-yah-FYAH-lah-yer-kuhl). The glacier-capped volcano began belching ash on April 13 and shows no signs of stopping. It last erupted from 1821 to 1823. I thought you might be interested in what is happening on the ground. This event caused total upheaval, closing most of the airports in Europe for over a week. My wife and I were in Rome, planning to travel to Paris for several business meetings.
With air travel not an option, I decided to rent a car from Europcar and drive from Rome to Paris. Europcar wanted $160 for the 14-hour non-stop trip but also demanded a $1,000 drop fee. We declined, hoping to find something more affordable. While at a meeting at the U.S. Embassy in Rome, one of the attachés told me that 4,000 people took matters into their own hands—and feet—and actually walked through the Chunnel between France and the U.K. The Chunnel is a 31-mile undersea tunnel that usually carries cars, large trucks and high-speed rail. The ferries were operating across the English Channel but reserving a seat was impossible, according to Al Jazeera’s news network. I found I couldn’t get a seat on a train, rent a car, or book a flight. Germans bought bicycles in Italy and pedaled to Germany. People lived in airports for more than seven days without a shower and some without money to buy food.
My wife and I decided to look into returning to Atlanta and rescheduling my Paris meetings for later. One U.S. carrier wanted $10,600 for two one-way coach tickets to Atlanta’s Hartsfield-Jackson Airport. The following week, after companies began offering air flights again, the fare dropped to $1,518 for two. Rome was one of the few operating airports with flights headed to North America. All of Asia had cancelled most flights to Europe. People were stranded all over the world. On April 20, according to the BBC, the first seats available to book from Europe to the United States would be available on May 5.
We were staying at a hotel near the Via Veneto, a block from the U.S. Embassy. We had to check every morning to see if there was a cancellation for the days after our room reservation was set to expire. Between meetings, I was calling and visiting hotels to see if rooms were available. Three-star hotels were charging five-star hotel rates. While this seemed outrageous, it was less outrageous than the airline fares back to the United States.
My wife and I felt we were starring in the movie “Casablanca,” waiting every day for the plane to Lisbon. There was the anxiety of waiting to see if the plane would depart and whether we could find a hotel for another night. Just when frustration was becoming vexing, my wife smiled and said, “We’ve lived through a coup d’état in Africa and a car bombing in Madrid from the Basque. This is nothing.” She was right, of course. We laughed and strolled down the Spanish Steps towards the Piazza della Rotonda to a have a glass of wine and watch the sun set at the Pantheon.
After my meeting at the U.S. Embassy in Rome, Bob Bannerman, Deputy Senior Commercial Officer, told me his wife and he were going to drive to Paris if the airlines did not start operating by the weekend. He said that my wife and I could ride with them. However, he didn’t have enough space for our luggage, so we were prepared to ship our luggage via UPS for $460 from Rome to Paris. Like the Bannermans, we were fortunate when flights started operating for the weekend. People everywhere were just trying to help.
We were booked business class on Kuwait Airlines flight from Rome to Paris. The airline told us to call every morning to see if they would be able to fly on our date. We would not know until the morning of our flight whether the flight would be flying to Paris. If it did not leave on the scheduled day, then our names would be placed on the bottom of a waiting list – with thousands of names for a flight to Paris. We were both very excited the day we learned we would be going from Rome to Paris, on the first flight since all flights had been grounded. We were ecstatic to hear the plane’s door shut and jet engines whine up for takeoff. While there is no wine or champagne on Kuwait Airlines, the flight attendants made us feel very comfortable with Arabic coffee and dates.
After arriving in Paris our driver, Victor, substituted another driver, Joseph. Victor usually brings us from Charles de Gaulle to our friend’s apartment in Le Marais. Victor and Joseph had two charters. Joseph’s was from Paris to Rome, a distance of 893 miles (1,437 kilometers). Victor’s charter was from Paris to Moscow at 1,545 miles (2,486 kilometers). Victor and Joseph charge 2.5 Euros per kilometer. So the price from Paris to Rome came to $4,957 and $8,390 from Paris to Moscow. By car!
In traveling around the world for my business, I have learned that these types of events generally bring out the best in people, Mr. Bannerman and his wife included. People are going to need to muster all their patience and politeness when traveling this summer, because Eyjafjallajökull shows no sign of calming down.
2009 News
Hayden Global second half update
We started the second half of 2009 by circumnavigating the world. We traveled to Japan, Singapore, Malaysia, Thailand, India, The United Arab Emirates (UAE), and Egypt before returning to the United States.
The Indian economy is proving to be resilient during the current global crisis. The International Monetary Fund is projecting India’s economy will grow 5.4 percent in 2009 and 6.5 percent in 2010.
Along with our usual visits to large cities such as New Delhi, Chennai (Madras), Mumbai (Bombay), and Bangalore, we also visited the smaller cities of Kochi and Panaji in Southwest India. On previous business trips to India, we were in Dehra Dun near Nepal and the Chinese border.
Rural India’s economy is holding up better than the rest of India. India’s government has targeted specific projects to improve income and support higher prices for crops. These projects have greatly helped to sustain income levels in rural states of India. In contrast, the country’s manufacturing sector, after growing seven percent annually for the past 16 years, grew 2.4 percent in the 12-month period ending in March 2009. This has resulted in manufacturers making unpopular cutbacks. According to India’s Ministry of Labor, strikes at India’s manufacturing companies rose 48 percent in 2008.
One of the concerns with the Indian economy has always been the availability of long-term capital. The election of the Congress led coalition in May of 2009 prompted business forecasters to predict that this would lead to a more forceful implementation of economic reforms.
It appears the government stimulus measures of both India and China are having an effect on these economies. Government stimulus measures in China have helped real estate sales. These measures include lowering the down-payment requirement from 30 to 20 percent of home prices along with attractive terms on home mortgages. One concern in the Asian real estate market is that interest rates are usually fixed for only three years, leaving risk if rates rise from these low levels.
Singapore's real estate market has also improved. Speculative investors from China and other parts of South East Asia also drive Singapore.
With the exception of Japan and the UAE (United Arab Emirates), a great deal of the economic recovery we witnessed was reflected in the performance of the stock exchanges of these Asian countries. By country, India, Indonesia, Taiwan and Thailand each had gains of over 70 percent. They were followed by China, Hong Kong, and Singapore, which were up over 60 percent. Korea was up more than 40 percent.
Hayden Global first half update
In 2009 Robert F. Hayden & Company has already been to Beijing, Hong Kong, Shanghai, Dalian and Tianjin, China. We have also been to Hiroshima and Osaka, Japan, doing research. We also were in Busan and Incheon, Korea.
In January 2009, Robert F. Hayden & Company became an inaugural member of the America Rail Working Group (ARWG) at the U.S. Embassy in Beijing. Other members include General Electric, The Carlyle Group, Honeywell, UPS China, and Caterpillar.
We continue to work with companies seeking to take advantage of the $548 billion USD stimulus package the Chinese government has allocated.
2008 News
Robert F. Hayden & Company traveled to China five times in 2008, going to Beijing, Nanjing, Xian, Hong Kong, Kunming, and Shanghai. We were also in Suzhou, Jingdezhen, Wuhan, Jingzhou, Fengdu, and the Chongqing Municipality, home to 32 million people. In addition, we toured the Three Gorges Dam, the largest hydroelectric and dam complex in the world.
The company had meetings at both the old and the new U.S. Embassy in Beijing. The new embassy opened the same day as the 2008 Olympic Games. We also met with Chinese diplomats at the Chinese Embassy in Washington, D.C.
We expanded our ability to meet with certain U.S. government agencies that offer financial assistance to U.S. corporations competing with foreign companies in China. For example, in Beijing we met with the U.S. Commerce Department and worked with another US government agency in Beijing and in Washington D.C., to successfully secure a $210,000 grant for one of our clients.
We developed contacts with Chinese law firms specializing in intellectual property rights, employment law, and corporate formation within China. Additionally, we met with a number of joint ventures and with one of the largest ministries of the Chinese government in Beijing. We also attended conferences on Asian transportation in Shanghai.
We met with agencies of various U.S. state governments sponsoring assistance for Chinese companies to expand their manufacturing facilities in the U.S. Conversely, we met with Chinese agencies that help U.S. manufacturers do business in China and Chinese firms to do business in the United States. In 2008, one of these Chinese agencies brought 146 Chinese corporate representatives to the U.S. and purchased $13.6 billion USD in goods and machinery. We also collaborated with a number of U.S. companies already doing business in China.
On a cultural note, some of our clients visited the Forbidden City, Tiananmen Square, the Great Wall in Beijing, and Mao Tse-tung’s home in Shanghai. To better understand the social and commercial sectors of China, we visited the City of Fengdu. It is one of the new cities constructed for people displaced by the Three Gorges Dam project. We also visited an elementary school in Jingzhou to see firsthand the educational system. We visited a rail and logistics center in Kunming to better understand the massive $450 billion USD infrastructure project the Chinese government is undertaking in 2009. Finally, we toured port facilities in Hong Kong, Shanghai, Dalian, and Tianjin.
Rounding out 2008, Robert F. Hayden & Company investigated new opportunities in Europe and North Africa. In Europe we were in Portugal, Spain, France, Italy, and Sicily. In North Africa we were in Tunisia, Malta, and Morocco.
