Thursday, May 20, 2004

HIGHLIGHTS


BANKING – SERVICES

UBS enters ultra-high-net worth market, crowding industry
We've brought you news before of top Wall Street firms stepping up their plans to court ultra-high-net worth accounts, usually defined as $10 million or more.
The latest entrant: UBS. The Zurich bank on Wednesday offered details of its new, U.S.-based Private Wealth Management Group, which will be run by Managing directors Anthony DeChellis and Michael Schweitzer. UBS also hired two former Merrill Lynch bankers: Kevin Ruth, who serves now as senior vice president; and Michael Ban, who will head the Advanced Wealth Strategies Group. The move reflects the heated competition for these customers, who are obviously among the most profitable for full-service firms. With so many firms bent on carving out market share, this is a pretty good time to be in the ultra-high-net worth category. The competition will be fierce, however, and promotions will abound. In the end it really boils down to relationships. I look for the top firms to step up their recruiting as much as their marketing.
Source; CBS Market Watch, May 2004

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FOOD SECTOR – MERGERS AND ACQUISITIONS

Hain to buy frozen food brands from Heinz
Hain Celestial Group on Thursday said it agreed to buy the Ethnic Gourmet brand of ethnic frozen meals and Rosetto brand frozen Italian food from H.J. Heinz Co.
Terms were not disclosed. The brands had combined annual sales of about $30 million in 2003, and the deal is expected to add to earnings in the first fiscal year after closing.

Company Overview
H.J. Heinz Company
Manufactures and markets an extensive line of processed food products throughout the world. The Company's principal products include ketchup, condiments and sauces, frozen food, soups, beans and pasta meals, tuna and other seafood products, infant food and other processed food products. Its products are sold to chain, wholesale, cooperative and independent grocery accounts, pharmacies, mass merchants, club stores, foodservice distributors and institutions, including hotels, restaurants and certain government agencies. The Company manufactures and contracts for the manufacture of its products from a wide variety of raw foods. Heinz organizes its operations into five business segments: North America, U.S. Frozen, Europe, Asia/Pacific and Other Operating Entities.

The Hain Celestial Group, Inc.
(Hain Celestial) manufactures, markets, distributes and sells natural, organic, specialty and snack food products under brand names that are sold as better-for-you products. The Company's primary natural food brands include Celestial Seasonings teas, Hain Pure Foods, Westbrae, Westsoy, Rice Dream, Soy Dream, Imagine, Walnut Acres Certified Organic, Little Bear Organic Foods, Bearitos, Arrowhead Mills, Health Valley, Breadshop's, Casbah, Garden of Eatin', Terra Chips, Harry's Premium Snacks, Boston's, Gaston's, Lima, Biomarche, Grains Noirs, Yves Veggie Cuisine, DeBoles, Earth's Best and Nile Spice. Its principal specialty product lines include Hollywood cooking oils, Estee sugar-free products, Kineret kosher foods, Boston Better Snacks and Alba Foods. The Company's products are sold in all 50 states and in approximately 50 countries.
Source; Reuters; May 2004-05-20

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INTERNET – GLOBAL - SEARCH ENGINES

Google Moves Toward Clash With Microsoft
There's a story in the NY Times saying that Google will soon be launching a local search option: "Google, the Web search engine, is preparing to introduce a powerful file and text software search tool for locating information stored on personal computers."

Google is really launching an attack. First they've got the Google Mail thing, then the Google Groups 2, with the ability to create mailing lists, and now they're taking on Microsoft with a hard drive search. Strangely enough I think this third time may be the charm.

Why? Because one requests I get from readers all the time is pointers to a good hard drive search utility. AltaVista offered one, years ago, and people are STILL nostalgic about it. I'm not sure how many people need a gigabyte of mail space, and I’m not sure how many people need to start their own mailing list, but Google may be surprised at the amount of interest in a local search utility.
Source; NY Times, May 2004

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MEDIA – U.S.A. – NEWSPAPER

New York Times Updates Travel Section
The New York Times announced last week that they've updated their travel section with free archived content and some different search options. The New York Times travel section is available at Man, search boxes everywhere! Pay attention to the one up-top which allows you to search the travel section exclusively, and a "destinations" box which allows you to selection a world region and sub-region and get tons of information, including pictures, travel columns, and a lot of articles.

The front page of the travel section include a variety of articles, spotlights on, travel news, and some gorgeous pictures. Pay attention to the tabs near the top of the screen for pointers to a NYC guide, world guides, travel guides broken out by activity/interest (from Archeology to Wildlife) and more. Extensive.
Source; NY Times, May 2004

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FOOD SECTOR - BEVERAGE - CHINA

Interbrew, Zhujiang Brewery ink marketing, distribution pact
Belgian beer giant Interbrew said on Thursday it plans to cooperate on joint marketing and distribution with China's Zhujiang Brewery.
The two companies signed a memorandum of understanding at a ceremony in Guangzhou.
Source; Copyright 2004, Reuters News Service. May 2004


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SUPERMARKET - EUROPE - CORPORATE

Delhaize Launches New European Private-Label Brand
Delhaize Group announced a basic-quality, everyday-low-price private label called 365, to be rolled out to all stores operating under the retailer in Belgium, Greece, the Czech Republic and Romania.
The 365 assortment will be merchandised first in grocery, frozens, beverages (including wine), dairy and produce. At the same time, Delhaize officials announced they will phase out the existing Derby products in Belgium and C-brand items currently on shelves throughout the company's European marketing area. Officials described the product line's quality as equivalent to that of a hard discounter and "better than that of first-price products of competitors.
Date; May 2004.05.20

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DISTRIBUITION - CORPORATE

Kmart Reports Rising Profit, Falling Comps
Kmart here yesterday reported a profit of $93 million on sales of $4.6 billion for its fiscal first quarter ended April 28. The discounter, which emerged from Chapter 11 bankruptcy protection a year ago, lost $862 million during the same period last year. Comparable-store sales fell by 12.9% as Kmart focused on regaining profitability and liquidity by reducing expenses and inventories, said Julian C. Day, president and chief executive officer. The company attributed the comp decline to less advertising and to several promotions during the year-ago quarter. Total sales fell 25.3%, reflecting the closure of 316 stores during the first quarter last year.
Date; May 2004.05.20

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HOTEL - NORTH AMERICA MARKET

Small Luxury Hotels of the World Adds Three New Member Hotels in The Americas Region
Small Luxury Hotels of the World has added three new member hotels in The Americas region to the exclusive membership that already boasts over 300 hotels in 50 countries. The latest additions include the newly opened Brentwood Bay Lodge & Spa in Victoria, Canada, Hotel Teatro in downtown Denver and The Lodge at Molokai Ranch in Hawaii.
"These three new properties are great additions to our group. They all offer the comfort, quality and most importantly the experience that has become synonymous with SLH," commented Ed Donaldson, VP of Marketing for The Americas.

After two years and more than $11 million, Brentwood Bay Lodge & Spa (www.slh.com/brentwood) has constructed a contemporary resort located on a pristine inlet on Vancouver Island providing spectacular ocean views from every vantage point and perfect for SLH.
With natural materials, huge timbers and expansive glass, the resort is a sanctuary where understated elegance and discerning service are essential. The Lodge's dedication to luxury and quality is evident in the $340,000 they spent on each of the 33 Ocean Suites featuring king beds, fireside sitting areas, balconies, handcrafted furnishings and spa-like bathrooms. Comfort and relaxation continues with a visit to Brentwood Bay's spa which focuses on a unique west coast perspective with signature Essence of Life and Vinotherapy treatments. Brentwood's 65-slip Marina & Eco-Adventure Centre is the gateway to wine tasting, kayaking, scuba diving and eco-cruising in this unspoiled environment. Relaxing and fun possibilities abound at the newest member of Small Luxury Hotels.

Adding to SLH's presence in city centers is Hotel Teatro (www.slh.com/teatro), Denver's luxury boutique hotel. Located in downtown Denver and aptly named for its proximity to the theater, Hotel Teatro offers exquisite accommodations for the business traveler or weekend getaway. Unique costumes and photographs from past theatrical productions of the Denver Centre Theatre Company decorate the hotel lobby and guest rooms. Hotel Teatro offers 111 guest rooms which are decorated in rich, soft gold or sage tones. Indonesian sandstone foyers set the stage of refined elegance, complemented by custom built cherry wood armoires and headboards, luxurious damask fabrics, contemporary art deco furniture covered with fine fabrics, and luxurious touches like down comforters. Luxurious baths have Indonesian marble and sandstone finishes and are appointed with chrome features. All rooms feature custom desks with leather blotters, a laser printer, scanner, copier, fax, dedicated data ports, and two-line telephones with caller-ID and voicemail, as well as complimentary high-speed Internet access. Cultural senses are further aroused by Award-winning chef/restaurateur Kevin Taylor who operates the hotel's two restaurants - Jou Jou, a casual American bistro and Restaurant Kevin Taylor which provides a highly lauded fine dining experience. Hotel Teatro provides the perfect home-base to explore and experience the beauty and culture of Denver.

On the opposite end of the spectrum from a city center hotel is the magnificent Lodge at Molokai Ranch (www.slh.com/molokai) which is considered one of the remaining true Hawaiian experiences. General Manager Teri Waros commented, "This property offers a Hawaiian experience of what the islands were like before tourism brought the masses to paradise. I am ecstatic about becoming a member of SLH for the opportunity to share our uniqueness with travelers from around the world." The Lodge is set at the west end of Molokai, on the far edge of the 64,000-acre Molokai Ranch, with a view of Honolulu and Diamond Head in the far distance. The Lodge's 22 guest rooms are individually decorated with whimsical styling including hand-crafted furniture that ranges from Art Deco to Mission oak. Although a piece of natural paradise, guest rooms feature modern amenities such as TV's, phones, high speed Internet service and DVD players. As a result of Molokai's membership with SLH and dedication to luxury, they have begun a continuous upgrading of room interiors making them even more luxurious and comfortable. The property features a formal dining room where evening meals are dominated by an abundance of fresh seafood and wines from the Wine Spectator award winning wine list. An infinity edge pool is secluded just off the lodge offering gorgeous views of the ocean. The spa at Molokai offers an array of services including massage, facials and body treatments. To further enhance the relaxing nature of the lodge, a Tai Chi, Yoga and Hula pavilion is being constructed. Guests can indulge in a true old Hawaiian atmosphere and experience the best in eco-adventure.

Small Luxury Hotels of the World provides guests with unparalleled luxury experiences and these three new members will even further elevate the capacity to deliver grand experiences. The Small Luxury Hotels of the World brand is an exclusive membership of over 300 independently-owned luxury hotels in more than 50 countries.
Date; May 2004.05.20

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HIGHLIGHTS FLASH


ECONOMY - JAPAN RATES

Japan rate 2004 short view
Japan's economy sustained its bumper rate of growth, expanding by 4.7% in the year to the end of the first quarter. Rising consumer spending, exports and investment all helped.
Date; May 2004.05.20

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GOVERNMENT - EUROPE

The Alstom case
However, the EU was set to approve a French government bail-out of Alstom. The ailing engineering group's shares briefly surged on the news that approval for a euro3.2 billion ($3.9 billion) rescue package was coming. Germany's Siemens muttered about legal action to block the deal. It had hoped to benefit from a break up of Alstom.
Date; May 2004.05.20

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NAVAL INDUSTRY - GERMANY

Thyssen Krupp news
ThyssenKrupp hastened the pace of consolidation in Europe's naval-defence industry by agreeing a merger between its shipbuilding arm and HDW, the world's leading maker of non-nuclear submarines. The German industrial conglomerate will pay euro240m ($289m) for 75% of HDW.
Date; May 2004.05.20

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TECHNOLOGY - CORPORATE

HP financial view
Hewlett-Packard's profits in the latest quarter jumped by 34% compared with a year ago, to $884m. The giant computer firm said that corporate IT spending was recovering slowly.
Date; May 2004.05.20

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MEDIA - CORPORATE

Sony MGM strategies
Sony confirmed that it was in exclusive takeover talks with Metro-Goldwyn-Mayer, Hollywood's last big independent film studio. The Japanese entertainment giant may pay up to $5 billion to get its hands on MGM's back catalogue and reinforce its strategy of providing a complete package of hardware and content.
Date; May 2004.05.20

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AIRLINES - CORPORATE

BAirways profits on comingBritish Airways' cost-cutting efforts seem to be paying off. The airline said that profits for the year to March had nearly doubled compared with the year before, to £130m ($220m), despite a decline in revenues. But BA gave warning that rising fuel prices would hurt it and other airlines.
Date; May 2004.05.20

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TAX - SWISS

Switzerland and EU tax agreements
After years of wrangling, Switzerland finally agreed to levy a withholding tax on the savings accounts of EU citizens as part of a series of bilateral agreements that also includes deals on trade and the environment. Switzerland was rewarded with entry into the EU's passport-free area, probably in 2007.
Date; May 2004.05.20

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FOCUS

CORPORATE - MARKET STRATEGIES

P&G: Teaching An Old Dog New Tricks
CEO A.G. Lafley has kicked up the good ideas at the stodgy Midwestern giant—and the company's growth too. Here's an inside look at how he's doing it.

When Procter & Gamble purchased Iams five years ago, many people worried that the rule-bound behemoth would muck up the growth of the savvy pet-food marketer. Iams was one of those companies (think Starbucks) that had an almost magical bond with its consumers, selling $13 bags of cat food and other high-priced products exclusively in pet stores and through veterinarians. P&G, being P&G, flexed its marketplace muscle immediately: Using 3,000 trucks to move Iams into 25,000 mass retail outlets, it increased distribution nearly 50% overnight. Then, armed with research indicating that pet owners fear that their four-footed family members will die before they do, Iams's R&D folks began collaborating with Procter's scientists who study human hearts, bones, muscles, teeth, and gums. Iams unleashed a stream of new foods aimed at lengthening pets' lives —weight-control formulas, antioxidant blends, tartar-fighting "dental defense" ingredients.

It paid off: Iams has moved from the nation's No. 5 pet-food brand to No. 1. Worldwide sales have doubled to $1.6 billion; profits have tripled. Now, to woo vets, P&G is expanding Iams into the business of magnetic-resonance imaging—yes, Iams-branded MRIs for dogs and cats—and Iams-branded insurance to help pay for the $1,200 scans. "We're offering consumers peace of mind," says P&G CEO A.G. Lafley, who owns a Cavalier King Charles spaniel and two Maine coon cats.

Iams is just one example of how P&G is reemerging as master brand-builder and model growth company. P&G a growth company? Yes—thanks largely to the innovations that Lafley has sparked at the company. When he took over in the summer of 2000, things were grim. His predecessor, Dirk Jager, a brusque, hard-charging Dutchman who ran P&G for 17 months, grew one thing: costs. Volumes flattened and profit margins shrank on P&G's biggest brands, which include Pampers, Tide, and Crest. The stock fell 43%.
Date; May 2004.05.20

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