ASIAN BUSINESS FORUM

2nd MeetingMarch 28, 2012

“Foie Gras Rossini”$16

“Truffle Porcini Grilled Chicken”$11.50

U.S. Franchiser

Japanese Franchisee

U.S. Company Japanese Partner

Joint Venture In Japan(Wendy’s Japan LLC)

INDIA: COFFEE BOOM OR BUST?

NEWS UPDATE US consumes more than 1 million metric tons of coffee. Equates to about 9 lbs per person per year.

India consumes about 90 thousand metric tons of coffee. Equates to about ½ lb per person/ per year . Grows 3% of Worlds’ coffee needs.

So why all the fuss about Starbucks and Dunkin Donuts in India: A cup of coffee (interestingly called a latte in India) is Rs 250.00 / $5.00. 40% of India’s population is under 30 (CIA Data/Zacks Equity Research). Which is about 500 Million, equates to a potential of $2.5B if they drink one cup/year. SBUX will open 50 store by the end 2012 and DNKN 500 in 15 years. Target growth for same store sales : 10-15% YOY. Expected profit in 2013 for SBUX and DNKN approx $300M.

BTW, US does not grow any Coffee!, yet we are the 3rd Largest consumer.

2ND ASIA BUSINESS FORUM

INDONESIA: STATE OF THE AVIATION INDUSTRY

Anita Sulaiman, Country Adviser – Singapore & Indonesia

GEOGRAPHY & DEMOGRAPHICS IDEAL FOR AIR TRANSPORT

• 17,508 resource-rich islands spread over 5,000 km spanning 3 time zones: Aviation critical link

• Size: 2 million sq. km (736,000 sq. miles); about 3x Texas

• Lack of reliable alternatives: Poor road & rail infrastructure, dangerous seas to move people & goods

• Huge land & sea mass: Need to build defense capability

• Poverty improvement master plan (MP3KI: 2011 - 2025) targeted at 60 million (24% of population)

• = good news for booming market• Economic expansion (MP3E: 2011 – 2025) • = fast growing middle class• Annual GDP growth of 6.3% – 6.7% next 3 years * World’s largest archipelago

* World’s 4th most populous nation - 240 million people

COUNTRY HIGHLIGHTS & OVERVIEW

1. Indonesians stole limelight at Singapore Air Show - Largest contract in commercial aviation & Boeing history- Lion Air order of 230 Boeing 737 airplanes worth $22.4 billion- Option for 150 more aircraft ($14 billion): Total value of $36 billion- Their Wings Air bought 27 ATR 72-600 planes worth $610 million: World’s largest ATR

operator.- PT DI contract with Airbus Military: 9 C295 for Indonesian Air Force.- + 3 more for police air wing expected.- C295 program includes substantial collaboration/technology transfer2. Jakarta’s CKG became SE Asia’s busiest airport- 43.7 million passengers in 2010, 18% average yearly growth- To expand capacity: 60 million by 2016.3. Garuda “Best International Airline”: January 2012. - Roy Morgan Customer Satisfaction Award includes 4-Star Skytrax rating- 2010: World’s Most Improved Airline Award (Survey of > 200 airlines)4. Carriers respond to huge potential: Competition increasing- Tiger-backed Mandala- Pacific Royale launch- Airlines eye share sales: IAA, Garuda, Merpati, Lion Air5. Garuda expecting 20% revenue growth in 2012- 2011: Highest growthof 39%, net profit growth of 60%- IATA’s 2012 global profit margin forecast: 0.6%

CHALLENGES TO GROWTH

Airport infrastructure a major challenge

Indonesia 1.4% of global traffic but

accounted for 4% of accidents

Poor safety record: 42 accidents between

2005 & 2010(KNKT: 70% of crashes caused by human error)

Jakarta’s Soekarno-Hatta airport at beyond capacity last 5 years

(> 51 m passengers a year, > 2x designed capacity)

Inadequate air traffic management for

effective airspace use

Higher fuel prices threaten profitability

Euro zone troubles continue to weigh down

industry

Garuda only Indonesian airline out of 372 on

IOSA registry (Highest global standard for

airline operational safety)

Government slow to respond to need to

improve safety on the ground* & in the air(*Runway excursions)

INDUSTRY SOARING AMID OPTIMISM

6th fastest growing market for international

passengers (2010 – 2014: IATA)

2014: 9th largest domestic market* & top

10 for international freight

(* 100 million by 2015)

MRO big business & industrial partnerships formed* especially in

defense(* To develop local expertise)

Jakarta’s Soekarno-Hatta saw fastest

growth in passenger traffic in ASEAN: 2011

Increasing aircraft demand – civil &

military (Military on fleet modernization

plan)

Commercial airlines bullish: Accelerating

fleet & route expansion

Entry of new players into booming domestic, regional & international

markets

Government to give 6 local airlines Rp 265 billion ($29 million)

(To develop 132 routes to remote regions)

Plans to build 20 new airports in the next 15

years

THANK YOU | TERIMA KASIH

Anita Sulaiman anitasulaiman@aol.com

RECENT CHINA DEVELOPMENTS

David McHardy Reid PhDProfessor of Global Business Strategy

Albers School of Business and Economics Seattle University

CHINA SLOWING?

Recent anniversary of Shanghai Surprise

Equities volatility index doubled Stocks exposed to China have been

doing worse than others Exports declining

EXPORTS DECLINING

HARD LANDING?

Much worry about China’s ability to manage an economic “soft landing”

Economy heavily dependent on fixed investment

WHY IS THIS SIGNIFICANT?

CHINA SLOWING?

Seen significant decline in investment in roads and construction

Structural reasons for this Local governments (LGs) main

agents for this kind of activity LGs suffered sharp decline in

revenue

LOCAL GOVERNMENT STARVING?

REAL ESTATE ANOREXIA?

INVESTMENT SLOW DOWN

Much less likely to invest than before Land sales declined Growth rates declining by 40 to 70

percent 70 percent decline in land sales

INVESTMENT SLOW DOWN

Property companies buying less because they intend to build less

Land sales 30 percent of LG revenues

Now China showing 15 percent yoy growth of fixed asset investment (2012)

23.8 percent (2011)

GROWTH SLOW DOWN

Not talking of crash yet Beijing knows there is a problem Likely to see loosening of restrictions

on property Stimulus for consumer demand Lessening of bank required reserve

ratios Chongqing model Vs Hu-Wenbao

model

ASIAN BUSINESS FORUM

2nd MeetingMarch 28, 2012