Wal-Mart inspectors find more violations at foreign factories

Wal-Mart inspectors find more violations at foreign factories

The Jakarta Post

BENTONVILLE, Arkansas (AP): Wal-Mart Stores Inc. found a higher rate of severe violations at foreign factories last year as it stepped up inspections for labor and environmental standards in more than 60 countries where it buys clothes, toys, shoes andother products, it said in a report.

Only 23 factories were cut off from Wal-Mart's business for repeated violations, a sharp decline from 1,200 in 2004. But the retailer said that was in part because of a change in its auditing rules. It expects the number to increase again this year.

Wal-Mart posted its "2005 Report on Ethical Sourcing" on a section of its Web site last week but did not make any public announcement, spokeswoman Beth Keck said.

"In 2005, we audited more factories than any other company in the world, performing more than 13,600 initial and follow-up audits of 7,200 supplier factories," the report said.
The company is also the target of a U.S. lawsuit seeking class-action status for factory workers in Bangladesh, China, Indonesia, Nicaragua and Swaziland.

In 2005, Wal-Mart's inspectors reported what it calls "high-risk" violations at 52 percent of those factories, compared with 36 percent in 2004.

Medium-risk violations were reported at 37 percent of plants, down from 43 percent the year before. Only 10 percent of factories were found to have no violations or only minor ones, compared with 21 percent in 2004.

Last year, as Wal-Mart came under mounting criticism led by union-backed campaign groups, Chief Executive Lee Scott said Wal-Mart would step up enforcement of workplace and environmentalstandards. It does not own factories but instead buys from others who do. (**)

Asian Stocks.........

Asian Stocks Slide to 2-Week Low; Toyota Declines as Oil Gains
By Darren Boey

Sept. 26 (Bloomberg) -- Asian stocks dropped to a two-week low, led by Toyota Motor Corp. and Hon Hai Precision Industry Co., after oil rebounded from a six-month low.
``For the long term, oil prices will stay at a higher level because of rising demand in countries like China and India,'' said Tomokatsu Mori, who helps oversee $7.4 billion at Fukoku Capital Management Inc. in Tokyo. ``That will be a drag on U.S. consumption, and of course negative to exporters.''
The Morgan Stanley Capital International Asia-Pacific Index lost 0.4 percent to 125.89 at 7 p.m. in Tokyo, its lowest since Sept. 12. A measure of energy stocks including Woodside Petroleum Ltd. and Inpex Holdings Inc. was the only industry group that gained.
Japan's Nikkei 225 Stock Average lost 0.5 percent to 15,557.45 as Prime Minister Shinzo Abe prepared to name a new cabinet. Takeda Pharmaceutical Co. led declines among stocks that began trading from today without the right to a dividend.
Hong Kong's Hang Seng Index fell 1.4 percent, Asia's biggest loser, on concern new share sales by companies including China's biggest bank will drain funds from the market. China Mobile Ltd. led declines. Markets also dropped in Taiwan, Indonesia and China. They rose elsewhere.
Toyota, Japan's biggest automaker, fell 0.8 percent to 6,240 yen. Hon Hai Precision, Taiwan's biggest electronics company, lost 0.7 percent to NT$204. Hyundai Motor Co., South Korea's largest automaker, slipped 1.4 percent to 80,400 won.
OPEC Output
Crude oil prices climbed 1.5 percent to $61.45 a barrel in New York, rebounding from a six-month low, on speculation the Organization of Petroleum Exporting Countries may cut output to stem any price slump before the group meets in December. Prices were recently at $61.28.
``As a result of the OPEC talks, oil has stopped trending down,'' said Masaki Iso, who oversees about $7.3 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo.
LG.Philips LCD Co., the world's second-largest maker of liquid-crystal displays, tumbled 5.2 percent to 30,350 won. Citigroup Global Markets Inc. cut the stock to ``sell'' from ``buy,'' citing the likelihood of ``disappointing'' third- quarter earnings.
The MSCI Asia-Pacific Energy Index added 0.1 percent. Woodside, Australia's second-largest oil and gas producer, gained 1.6 percent to A$38. Inpex, Japan's largest oil explorer, rose 2.1 percent to 907,000 yen.
Politics, Dividends
Mizuho Financial Group Inc., Japan's second-biggest bank, lost 2.5 percent to 865,000 yen. Mitsui Trust Holdings Inc., Japan's No. 6 banking group, lost 1.8 percent to 1,241 yen.
The 52-year-old Abe, a third-generation politician whose grandfather was prime minister, was elected in a special session of parliament, succeeding Junichiro Koizumi.
``Abe's economic policies have not been clearly laid out and as a result foreigners are going to refrain from participating in this market until they are,'' said Yoshihisa Okamoto, who helps oversee $1.9 billion in assets at Fuji Investment Management Co. in Tokyo.
Takeda, Japan's biggest drugmaker, dropped 1.5 percent to 7,210 yen. Astellas Pharma Inc., the third largest, lost 1.7 percent to 4,590 yen. NEC Corp., the nation's second-largest mobile-phone maker, declined 2.9 percent to 636 yen.
Today 1,240 of the 1,696 stocks included in the Topix index traded without entitling the buyer to receive a dividend, the Tokyo Stock Exchange said.
Hong Kong
The Hang Seng Index had its steepest slide since Aug. 21. China Mobile, the world's largest cellular operator by value, lost 0.9 percent to HK$55.10. Hutchison Whampoa Ltd., controlled by billionaire Li Ka-shing, fell 0.8 percent to HK$69.30. The two stocks account for about a quarter of the index.
Beijing Capital International Airport Co. dropped after selling shares at a discount, selling shares at a discount, the latest company to sell shares. The Hang. Esprit Holdings Ltd.'s chairman last week sold $754 million of shares in his company.
Shui On Land Ltd. is due to price its $796 million initial public offering on Sept. 27. ICBC Ltd., China's biggest bank, plans to sell about $19 billion of shares next month, people familiar with the sale said. Astellas Pharma Inc. (4503 JT)
Hon Hai Precision Industry Co. (2317 TT)
Hyundai Motor Co. (005380 KS)
Inpex Holdings Inc. (1605 JT)
LG.Philips LCD Co. (034220 KS)
Mizuho Financial Group Inc. (8411 JT)
Mitsui Trust Holdings Inc. (8309 JP)
NEC Corp. (6701 JT)
Takeda Pharmaceutical Co. (4502 JT)
Toyota Motor Corp. (7203 JT)
Woodside Petroleum Ltd. (WPL AU)
To contact the reporter on this story:

Darren Boey in Hong Kong at dboey@bloomberg.net

Last Updated: September 26, 2006 06:03 EDT

To Make Fun

When You Are Your Own Client, Who Are You Going To Make Fun Of At The Bar?
by Jim Coudal
Published in: Business, Graphic Design, Industry, Politics and Money
Discuss this article »

So there’s this table with three chairs around it. It’s a very old table. These same people have been sitting here forever. The guy who created a product sits in one spot. Across from him is the guy who buys the product. And then there’s that other chair.

We’ve sat there frequently. Basically, the first guy pays us to find the second guy and convince him to buy what the first guy is selling. It’s a pretty important function, maybe the most important. Without it, there’s just one guy sitting at a table and nothing happens.
For performing this function, generally we are contracted on a “work-for-hire” basis. That’s nice and frequently lucrative. But, over time, we’ve developed some problems with it. You see, once we hand over our creative work we lose all connection to it and immediately stop profiting from it.
If I were an actor and was cast in a potato chip commercial I’d be getting a check every thirteen weeks for as long as they used the film of me doing a simple “bite and smile.” But, if I create a potato chip brand name and identity system out of whole cloth for a corporation and they sell millions of those salty snacks every month, I get nothing beyond my original fee. Of course, I’m the one who made that awful deal. It’s my fault if I enter into an agreement that sells myself short. True enough, but there is very little room for earning on the ‘residual value’ of creative in the marketplace and it’s important to remember that someone else will always be willing to charge a little less than you to get the business.
Aside from all that, the client/creative relationship can often be contentious and result in the production of professional work that may or may not be effective and more important to us, may or may not be great. There’s nothing worse than sweating over a project and then not wanting to show it to anyone after it’s complete. No amount of money is going to make that feel better.
It occurred to us about two and a half years ago that there was only one way to take complete control of our own destiny as creatives. We needed to sit at all the chairs at that old table.
Like many small firms, we saw a lot of business dry up in 2002. Marketing and advertising budgets tend to be the first costs sacrificed in the face of a tough economy. At the time, it seemed like we were being conspired against. First one loyal client would get bought and they’d hire someone else, and then another would slash their budget to almost nothing. Long-term this was a positive because it made us reevaluate what it means to be “successful.” But it wasn’t much fun.
If business hadn’t slowed down, who knows what would have happened. It’s very easy to get caught up in the rush for new business and the need to service clients and then expand staff and then have to chase more business to pay for that. It happened to us because we didn’t have time to reflect on the fact that we were producing art and copy we didn’t love. We just couldn’t see any other possibility. Nothing will make you think faster or more creatively than knowing there is less in the bank account on Tuesday than you need to make payroll on Friday.
Frankly, we were tired of being at the whim of forces that we could not control and we set a goal of converting half of the studio’s revenue into businesses we owned outright or relationships with companies we believed in that would allow us to share financially in the success of the work we did on their behalf. And then we didn’t do anything about it for a while. Except think.
On the plus side, we had talent, taste and enthusiasm and a lot of knowledge about the crafts of design, advertising and marketing. Plus, we had coudal.com, our studio site, that we had been faithfully updating since Halloween of 1999 and that generates thousands and thousands of page views every day.
Hmmm.
At SXSW this year, I answered the question “should my business have a weblog?” like this. If you need to make copies of documents you should have a Xerox machine and if you have information about your product or service that needs to be updated regularly then you should have a blog. But the really interesting question is this, “Should my blog have a business?”
The old idea is to create a product and go looking for a market. “If you build it they will come.” The minute we saw this equation from the other side we knew what we had to do. Without realizing it, we had already built the audience, now we needed to create a product for it. “If they come, you will build it.”
The people visiting our site seem very familiar to us. They like what we like. They read what we read. They buy what we buy. That’s why they come to the site or subscribe to our feed and take part in our goofy features and contests and write us emails and send us links.
We’ve spent a lifetime trying to think like “the target market” on behalf of clients. That’s always a challenge, but this is different. There’s an amazing freedom in building something for yourself.
I’ll refrain from telling the whole story of how Jewelboxing became our first studio business, or how a political dinner conversation became Lowercase Tees. And the one about how we put The Show together in 72 hours is fairly interesting too, but what it all comes down to is this. If you want to free yourself from the tyranny of clients you have to become one.
We share more than just a loft studio and a mania for simplicity and white-space with Jason Fried and 37signals. We share a lot of ideas about independence and building big things with small teams too. 37signals needed a way to manage communications on client projects that was “stupid simple” so they built Basecamp and thousands of other people just like them needed it too. Jason said, “When you are your own target audience you can’t help but make better products.” Same goes for David Greiner, who, as part of the Switch I.T. design firm in Australia, hated the options available for managing email campaigns and so they built Campaign Monitor, “We focused on the features we needed and it turns out that thousands of other web designers found those features just as useful.”
There has been a bit of talk here and there lately about “design entrepreneurship” and I guess that’s as good a title as any. New tools and technology have made it much easier for small teams to run the manufacturing, financial and distribution side of things. The cost of entry for a new business can be calculated more often in hours of work than in sums of cash.
Real value is found in creativity and in the application of craft as it relates to marketing and communications. I wonder, what kind of companies are best suited for that sort of thing?
Disclaimer. When I refer to “clients” in the discussion of this matter it should be assumed that I am referencing fictitious people who bear no resemblence to real individuals, living or dead and especially not to current clients of Coudal Partners who are uncommonly generous, open-minded and insightful.

Princess advertises herbal medicine

Princess advertises herbal medicine

SURAKARTA, Central Java: Gusti Kanjeng Raden Ayu Indriyah, the younger sister of Surakarta Sultan Sunan Paku Buwono XIII, is starring in a TV commercial advertising a traditional herbal medicine produced by Semarang-based company PT Nyonya Meneer.
Although already 45, Indriyah, a mother of one, still looks fresh and beautiful.
"Thanks to the jamu I routinely take," the princess told The Jakarta Post recently, using the Indonesian name for traditional herbal medicine.
The product being plugged by the princess, which is marketed as Jamu Awet Ayu Nyonya Meneer, is advertised as being able "to maintain and energize one's beauty".
Indriyah said she had been taking herbal medicine since a teenager. Back then her mother prepared the jamu.
"I have tried many products, but so far I have found the products of Nyonya Meneer best suit my needs," she said. "If I were an expert at jamu making, I would surely have my own production factory."
She says she takes jamu with her wherever she goes. "Even when I stayed in Washington DC, jamu was always there on my daily menu." -- JP

IMF secures reform policy, WB its antigraft strategy

IMF secures reform policy, WB its antigraft strategy
Riyadi Suparno, The Jakarta Post, Singapore

Shareholders approved governance reform for the International Monetary Fund (IMF) and the anticorruption strategy of the World Bank at the close of their annual meeting here Wednesday, but there were dissenting voices.
Most of the 184 member countries voted to endorse the proposal tabled by IMF Managing Director Rodrigo de Rato that would give an increase in voting power to four underrepresented developing countries -- China, South Korea, Mexico and Turkey. However, 23 developing countries, led by India, voted against the reform.
"This week's vote is not the end of our work on quotas, but the beginning of a process that will continue during the next year," de Rato said in closing remarks.
Developing countries like India considered the reform measures too timid, arguing they failed to address the core problem of imbalance in representation. Developed nations lauded them, with Gordon Brown of Britain terming it the biggest reform in the governance of the IMF for 60 years.
World Bank President Paul Wolfowitz also said the IMF reform gave fairer weight and voice to all member countries, noting it was not an easy venture to reform an international institution.
"Change in any multilateral institution is difficult. Rodrigo, you have accomplished it. I want to congratulate you," Wolfowitz said in his closing speech.
The bank itself received an endorsement from its board of governors for its governance and anticorruption strategy, although with some qualifiers. The governors want the bank to consult with recipient countries in implementing the strategy that would attack corruption on three fronts: project, country and global levels.
"Clearly, this is an immensely complex issue, so our strategy must engage as thoroughly as possible with our member countries and seek to understand their individual situations in as much detail as possible," Wolfowitz said in welcoming the board's recommendations.
The bank also gained approval from the board to transfer $800 million from its net income and surplus, as well as $150 million of the International Financial Corporation's retained earnings, to the International Development Association, which will then channel it to poor-income countries as concessionary loans.
The board also approved an additional $200 million of the surplus to cover emergency operations, such as in Lebanon.
The two Bretton Woods institutions also unanimously called for the resumption of the stalled trade talks under the World Trade Organization by the end of this year, so that developing countries would be able to benefit more from global trade.
"I hope this message goes out loud and clear to trade negotiators, to political leaders and to citizens," de Rato said.
Negotiations of the Doha Development Round were suspended indefinitely at the end of July because of the U.S. refusal to indicate any cut in farm subsidies.
U.S. Secretary of the Treasury Henry M. Paulson indicated here that his country was ready to revive the trade talks.
Paulson and other finance ministers of developed countries gathering here also agreed to pool a total of $5 billion a year in the aid-for-trade program. It will be used to help finance infrastructure and capacity of poor countries so that they could benefit more from trade liberalization.

Business Valuation Methods

Business Valuation Methods

Adapted from content excerpted from the American Express® OPEN Small Business Network

There are a number of instances when you may need to determine the market value of a business. Certainly, buying and selling a business is the most common reason. Estate planning, reorganization, or verification of your worth for lenders or investors are other reasons.

Valuing a company is hardly a precise science and can vary depending on the type of business and the reason for coming up with a valuation. There are a wide range of factors that go into the process -- from the book value to a host of tangible and intangible elements. In general, the value of the business will rely on an analysis of the company's cash flow. In other words, its ability to generate consistent profits will ultimately determine its worth in the marketplace.

Business valuation should be considered a starting point for buyers and sellers. It's rare that buyers and sellers come up with a similar figure, if, for no other reason, than the seller is looking for a higher price. Your goal should be to determine a ballpark figure from which the buyer and the seller can negotiate a price that they can both live with. Look carefully at the numbers, but keep in mind this caution from Bryan Goetz, president of Capital Advisors, Inc., a business appraiser: "Businesses are as unique and complex as the people who run them and are not capable of being valued by a simplistic rule of thumb."

Here are some of the common methods used to come up with a value.

1. Asset valuation
2. Capitalization of income valuation
3. Owner benefit valuation
4. Multiplier or market valuation
   

Asset Valuation

Asset valuation is used when a company is asset-intensive. Retail businesses and manufacturing companies fall into this category. This process takes into account the following figures, the sum of which determines the market value:

• Fair market value of fixed assets and equipment (FMV/FA) - This is the price you would pay on the open market to purchase the assets or equipment.
• Leasehold improvements (LI) - These are the changes to the physical property that would be considered part of the property if you were to sell it or not renew a lease.
• Owner benefit (OB) - This is the seller's discretionary cash for one year; you can get this from the adjusted income statement.
• Inventory (I) - Wholesale value of inventory, including raw materials, work-in-progress, and finished goods or products.

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Capitalization of income valuation

This method places no value on fixed assets such as equipment, and takes into account a greater number of intangibles. This valuation method is best used for non-asset intensive businesses like service companies.

In his book "The Complete Guide to Buying a Business" (Amacom, 1994), Richard Snowden cites a dozen areas that should be considered when using Capitalization of Income Valuation. He recommends giving each factor a rating of 0-5, with 5 being the most positive score. The average of these factors will be the "capitalization rate" which is multiplied by the buyer's discretionary cash to determine the market value of the business. The factors are:

• Owner's reason for selling
• Length of time the company has been in business
• Length of time current owner has owned the business
• Degree of risk
• Profitability
• Location
• Growth history
• Competition
• Entry barriers
• Future potential for the industry
• Customer base
• Technology

Again, add up the total ratings, and divide by 12 to come up with an average value to use as the capitalization rate. You next have to come up with a figure for "buyer's discretionary cash" which is 75% of owner benefit (seller's discretionary cash for one year as stated on the income statement). You multiply the two figures to determine the market value.

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Owner benefit valuation

This formula focuses on the seller's discretionary cash flow and is used most often for valuing businesses whose value comes from their ability to generate cash flow and profit. It uses a fairly simple formula -- you multiply the owner benefit times 2.2727 to get the market value. The multiplier takes into account standard figures such as a 10% return on investment, a living wage equal to 30% of owner benefit, and debt service of 25%.

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Multiplier or market valuation

This approach finds the value of a business by using an "industry average" sales figure as a multiplier. This industry average number is based on what comparable businesses have sold for recently. As a result, an industry-specific formula is devised, usually based on a multiple of gross sales. This is where some people have trouble with these formulas, because they often don't focus on bottom line profits or cash flow. Plus, they don't take into account how different two businesses in the same industry can be.

Here are a few industry multiplier examples, as mentioned in "The Complete Guide to Buying a Business" by Richard Snowden (Amacom, 1994):

• Travel agencies - .05 to .1 X annual gross sales
• Ad agencies - .75 X annual gross sales
• Retail businesses - .75 to 1.5 X annual net profit + inventory + equipment

To find the right multiplier for your industry, you can try contacting your trade association. Another option is to utilize the services of a broker or appraiser who specializes in businesses such as yours.

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SPAM CHECKERS

Deliverability has become a hot topic for e-mail marketers. The more SPAM there is, the harder users try to protect themselves and their inboxes from it. Of course that makes it harder for legitimate e-mail to get through as well.
Legitimate e-mail messages are more likely to be filtered if they resemble SPAM: that is, if they contain trigger words such as sex, free, guarantee, V!agra, etc. ; if they have ALL CAPS in the subject line; lots of !!!!marks, etc.
There are some new and very useful tools for email marketers to test their messages against SPAM filters before they're sent. Some of them are:
http://spamcheck.sitesell.com/http://www.enetplace.com/spam-checker.htmlhttp://www.lyris.com/resources/contentchecker/
Comment, please, with your experiences in using these or other SPAM checkers.

Paypal Launches Online Merchant Network

If you're looking for a venue to discuss Paypal, other alternative payment systems, or just e-business in general, take a look at Paypal's new Online Merchant Network. The site provides advice and networking opportunities for any Web-based business, whether or not it uses Paypal. Topics on the network focus on best practices to help a business grow and thrive, from search engine optimization, to marketing and online payments.
Right now, you'll find an interesting series of short articles called the "Selling Season Tune Up" which will show you how to manage supplier and staffing issues as you head into the busy holiday season.

WHAT'S NEW ON-LINE

Electronic Commerce has become a hot topic--encryption of data, virtual
transactions, the World Wide Web, and more--all carried by the medium of the
Internet--are subjects of considerable and growing interest in the word of
international trade. What do they have to do with the NIS, however, where
old-fashioned paper commerce is mysterious enough? If fact, quite a lot, especially
for small firms that need access to market information, trade leads, business
contacts and other basic information essential to building an international business.
The World Wide Web section of the Internet, where BISNIS has its own, rapidly
growing BISNIS On-Line Home Page, is where electronic commerce meets the
realities of doing business in the NIS.
Cables and Much More
Among the most important features of BISNIS On-Line are the U.S. Embassy cables
that BISNIS receives relating to commercial issues in the NIS. Everyday, BISNIS
and U.S. Commercial Service personnel and contractors throughout the NIS are at
work gathering vital market intelligence for dissemination to U.S. companies.
These cables, sent from embassies and consulates throughout the NIS, are the
result. An average of three to five new U.S. Embassy reports are uploaded each
day into a growing database of commercial information.
Thanks to a powerful search engine, U.S. companies can now execute complex
searches to obtain only those cables and other reports that interest them most.
This search engine is also employed to allow U.S. companies to efficiently access
the full range of BISNIS publications including BISNIS Bulletin, BISNIS Search for
Partners, and Commercial Opportunities. Other popular features of BISNIS On-Line
include BISNIS's guide to Sources of Finance for Trade and Investment in the NIS,
market information on each of the 12 NIS countries, a weekly graph of U.S.
Dollar/Russian Ruble exchange rates, E-mail connections to each of the 10
American Business Centers in Russia, and links to dozens of other Web sites
related to commercial issues in the NIS.
Since the BISNIS On-Line "Home Page" was established last March on the World
Wide Web, BISNIS has continued to expand its use of the Internet to make
commercial information on the New Independent States available to U.S.
companies. The volume of information on the BISNIS On-Line "Home Page" has
grown dramatically over the last nine months, contributing to a rapid increase in
the number of users. BISNIS On-Line is now receiving nearly 6000 "hits" per week
from a client base that is growing 20 percent monthly.
E-Mail Groups
For BISNIS clients that don't yet have the time or technical capacity to "surf" the
World Wide Web, BISNIS is also using e-mail reports to deliver tailored information
on NIS markets directly into the hands of those who can use it. BISNIS currently
maintains 15 separate E- mail groups to distribute NIS market information on
subjects such as agribusiness, computers, telecommunications, and trade finance.
Companies focusing on NIS states other than Russia may also join e-mail groups
devoted to those countries. Finally, those with a broader interest in information on
Russian economic developments, NIS trade leads and upcoming NIS trade events
can subscribe to "BISNIS Briefs", a bi-weekly E-mail report dedicated to these
topics. BISNIS e-mail reports are now reaching an average of 600 U.S. companies
each week and are growing rapidly. To subscribe or find out more about BISNIS
e-mail reports, send us a message at bisnis@ita.doc.gov giving your name, company
name, phone/fax numbers and U.S. mailing address. To access BISNIS On-Line,
simply enter the URL address http://www.itaiep.doc.gov on your World Wide Web
browser and look for the BISNIS icon.
**Produced by the Business Information Service for the Newly
Independent States (BISNIS)