" I heard it through the AgLine"

April 30, 2010

 

 

·        Agriculture, biotech firms on Chinese radar  

·        Chili peppers leading to hot new painkiller

·        Plants control food chain from the bottom up

·        Concrete jungle sends growers to the rooftops

·        Churches to conduct Blessing of the Tractors

 

 

Agriculture, biotech firms on Chinese radar 

 

(AP via Yahoo! News) – GUANGZHOU, China – The economics of Barbie dolls helps explain why Chinese companies are increasingly snapping up famous brands like the most recent big target: Volvo.

 

Chinese officials and businesses cite a much-noted analysis by UBS economist Dong Tao who said the busty plastic doll is sold for $20, but the Chinese manufacturer only earns 35 cents from that. The lesson: the big money is in owning the brand, not just making it for foreign companies.

 

The bulk of China's foreign investment is still being done by state-owned enterprises in energy and natural resources, said Peter Thorp, the Asia managing partner for law firm Allen & Overy.

 

But the investment patterns will change in the near future, with more private investors and companies diversifying into biotechnology, agriculture and pharmaceuticals, said Thorp. He said half the business done by his firm's China offices involves Chinese firms investing overseas.

 

"One can never be sure what's going to be the hot sector, but we're seeing real estate as one that is increasingly active," Thorp said. "And the reason for that is very obvious: You have low valuations in many markets, and you have Chinese investors with plenty of money to spend."

 

China's biggest acquisitions abroad are by state-owned companies that are investing in mines and oil fields _ deals geared toward supplying the country's rapidly growing economy with raw materials. But ambitious private companies are acquiring foreign brands in hopes of speeding up their evolution into international competitors. The trend began a few years ago, but analysts say it's speeding up now, and could generate a backlash overseas. The acquirers, meanwhile, sometimes have little global experience and could struggle to make a success of the acquisitions.

 

"A lot of Chinese companies are ranked in the Fortune 500 now, and they want to do some deals that reflect their international prestige," said He Yuxin, analyst at Dragonomics, a research firm in Beijing.

 

For a decade, China has been encouraging its companies to think big and expand abroad to diversify its economy. China's foreign direct investment more than doubled from 2007 to 2008, rising to $55.9 billion, according to the Ministry of Commerce. Yet-to-be-released figures for 2009 were expected to be even higher.

 

The surge in Chinese acquisitions is reminiscent of Japan's buying binge in the 1980s when the Japanese splurged on trophy assets like the Pebble Beach Golf Links in California and Rockefeller Center in New York. Those deals sparked a backlash from Americans fearful the Japanese were taking over the world.

 

Similar resistance has scuttled a few large Chinese deals. There's much debate about whether Chinese will make some of the same mistakes as the Japanese, such as buying overpriced assets they can't manage.

 

The Chinese will continue to bump up against more hostility overseas if they try to buy big stakes in backbone or sensitive industries, such as oil companies, said Huo Jianguo, president of Chinese Academy of International Trade and Economic Cooperation, a Commerce Ministry think tank in Beijing.

 

"But if they are projects that are based on mutual benefits and bring along local employment and tax revenue, they will be welcomed," he said.

 

Cash-starved companies welcome Chinese investment or acquisition offers. General Motors Co. jumped at the opportunity to unload its Hummer brand on China's Sichuan Tengzhong Heavy Industrial Machinery Corp. The Chinese government, however, vetoed the deal.

 

Other recent acquisitions of famous brands include Nanjing Auto Group's purchase of Britain's MG sportscar brand. Beijing Automotive Industry Holding Co. purchased Saab Automobile's core technology from General Motors Co. The deal didn't include Saab's brand or factories, but the link with the famous Swedish automaker will likely provide crucial cachet for the Chinese company in its home market.

 

The push overseas comes amid grumbling from foreign companies in China who say business conditions are souring for them. A recent report by the American Chamber of Commerce in China accused Beijing of shutting out foreign companies in various market segments in a bid to bolster Chinese global competitors.

 

Andy Xie, an independent economist in Shanghai, doesn't think the two phenomena are connected.

 

"It's just the rise of the state-owned enterprises," said Xie. Policies have been favoring state-backed firms and "Chinese private companies are facing the same trouble," he said.

 

But China might incite a protectionist backlash if it restricts its market at home while aggressively expanding overseas.

 

Recently, the big head-turning deals have been in the auto industry.

 

The European luxury car maker Volvo was purchased by Zhejiang Geely Holding Group, an automaker that is relatively unknown outside of China. The Chinese firm bought Volvo for $1.8 billion from cash-strapped Ford Motor Co., which was desperate to unload it.

 

Geely's purchase of Volvo was done for two of the main reasons why Chinese companies are investing abroad, said He, the Dragonomics analyst. One of the reasons was bargain hunting, getting a solid brand at a good price, she said.

 

The other was Geely could acquire technology that would strengthen its position back home. She said China's Lenovo Group, the world's fourth-largest personal computer maker, did the same thing in 2005 when it acquired IBM Corp.'s PC unit _ a move that boosted the Lenovo's market share in China.

 

Other Chinese acquisitions have been "deals driven by desperation" by companies struggling with razor-thin profit margins and other growth barriers in China, He said. One example was TCL Group's ill-fated joint venture with French TV maker Thomson and the RCA brand in 2003. The partnership has fallen far short of its goal to create the world's top-selling TV maker.

 

"Thomson's brand didn't do well in the U.S. or Europe," He said. "It didn't have a technical advantage in the Chinese market, which is very globalized with Japanese and Korean competitors."

 

A study of Chinese mergers and acquisitions by the Economist Intelligence Unit said that China's companies still face several major handicaps when investing abroad. One is that companies registered in mainland China have to get overseas investments approved by the government, which is keen to avoid embarrassment and can be overly cautious. This can cause serious delays for Chinese firms competing with American and European bidders with much more experience in negotiating and lining up finance, the report said.

 

The report includes a survey of 110 Chinese executives, with 82 percent of them saying a lack of management expertise was their biggest challenge when investing overseas. Only 39 percent of them said they knew what was required to integrate an acquired foreign firm into their company.

 

Stephen Joske, director of the China Forecasting Service at the Economist Intelligence Unit, said many of China's recent acquisitions could have problems.

 

"We'll have to wait and see, but it's not going to be a simple process," he said. "China has a long learning process to go through in terms of how to operate in foreign markets and how to operate foreign companies in those markets."

 

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Chili peppers leading to hot new painkiller

 

(bbc.co.uk) – Studying chilli peppers is helping scientists create a new type of painkiller which could stop pain at its source.

 

A team at the University of Texas says a substance similar to capsaicin, which makes chilli peppers hot, is found in the human body at sites of pain.

 

And blocking the production of this substance can stop chronic pain, the team found.

 

They report their findings in the Journal of Clinical Investigation.

 

Capsaicin is the primary ingredient in hot chilli peppers which causes a burning sensation.

 

It does this by binding to receptors present on the cells inside the body.

 

Similarly, when the body is injured, it releases capsaicin-like substances - fatty acids called oxidized linoleic acid metabolites or OLAMs - and these, via receptors, cause pain, the researchers have found.

 

Blocking pain

 

Dr Kenneth Hargreaves, senior researcher at the Dental School at the University of Texas, and his team next set out to see if they could block these newly discovered pain pathways.

 

Lab work on mice showed that by knocking out a gene for the receptors, there was no sensitivity to capsaicin.

 

Armed with this knowledge they set about making drugs to do the same.

 

Dr Hargreaves said: "This is a major breakthrough in understanding the mechanisms of pain and how to more effectively treat it.

 

"We have discovered a family of endogenous capsaicin-like molecules that are naturally released during injury, and now we understand how to block these mechanisms with a new class of non-addictive therapies."

 

Ultimately, he hopes the drugs will be able to treat different types of chronic pain, including that associated with cancer and inflammatory diseases such as arthritis and fibromyalgia.

 

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Plants control food chain from the bottom up

 

(Cornell University via redOrbit.com) – Forget top-to-bottom only. New Cornell University evolutionary biology research shows how plants at the bottom of the food chain have evolved mechanisms that influence ecosystem dynamics as well. (Science, March 26, 2010.)

 

"The ecology and interactions of most organisms is dictated by their evolutionary history," said Anurag Agrawal, associate professor of ecology and evolutionary biology (EEB), the study's senior author.

 

In food webs, predators help suppress populations of prey by eating them; that frees species lower in the food chain, such as plants, to flourish, a dynamic called a "trophic cascade." Most trophic cascade studies have focused on the ability of predators to increase plant biomass by eating herbivores. Such studies typically find strong trophic cascades in aquatic environments, where big fish eat minnows, which eat the tiny algae-eating crustaceans called daphnia.

 

Agrawal, first author Kailen Mooney, who is a former Cornell postdoctoral researcher and now assistant professor at the University of California-Irvine, and colleagues studied trophic cascades in 16 milkweed species, famed for their interactions with monarch butterflies, and also fed upon by aphids.

 

Plants have evolved three main strategies for increasing their biomass as much as they can against the forces that limit their growth, said the researchers: They grow as quickly as possible; develop direct defenses, such as toxins or prickly leaves, against herbivores; and attract such predators as ladybugs that eat their pests.

 

But plants do not have the resources to develop all three defenses. Since Darwin, evolutionary biologists have hypothesized that over millions of years of evolution, plant species are subject to trade-offs, developing some defense strategies in lieu of others; a key finding of the new study is that these evolutionary trade-offs drive how modern ecosystems are structured.

 

In the case of milkweed, some favored fast growth and the ability to attract predators while putting less energy into resisting herbivores.

 

The study found that one of the major factors leading to greater milkweed biomass (or growth) is the production of volatile compounds called sesquiterpenes, which attract such predators as aphid-eating ladybugs. But surprisingly, the plants' biomass increases regardless of whether ladybugs or other aphid predators are present.

 

The reason, the researchers suggest, is because the trait to produce sesquiterpenes appears genetically linked to faster growth; the strategy here is to replace leaves faster than they can be eaten. At the same time, milkweed species that put more energy into growing faster put less energy into resisting such pests as aphids.

 

"Because no species can do everything, milkweeds that grow fast necessarily have lower resistance to aphids," said Agrawal. "Thus species that grow fast benefit the most from predators" of aphids.

 

The findings have implications for agriculture, as conventional strategies for controlling pests often involve spraying insecticides, said Agrawal. "By including the evolutionary history in our understanding of natural pest management, we gain insight into plant strategies that have stood the test of time, and this may provide hints for breeding crops with traits that ensure robust lines of defense," he added.

 

Co-authors include Andre Kessler, assistant professor, and postdoctoral researcher Rayko Halitschke, both in EEB at Cornell.

 

The study was funded by the National Science Foundation, Cornell Center for a Sustainable Future and University of California-Irvine's School of Biological Sciences.

 

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Concrete jungle sends growers to the rooftops

 

(AFP) – Urban farming is a growth industry in New York City’s concrete jungle, and with little open land free agriculturalists and beekeepers have taken to the rooftops to pursue their passion.

 

Andrew Cote uses the emergency fire ladder to climb up to the roof of his East Village building, where he tends to 250 bee hives.

 

Cote, a professor of Japanese literature, doubles up as president of the New York City Beekeepers Association, and is happy that the city authorised beekeeping in mid-March after an 11-year ban.

 

“The city wants to plant one million trees, and the trees need to be pollinated,” Cote told AFP.

 

The ban forced beekeepers into hiding, fearing a US$2,000 (RM6,400) fine if caught. Now Cote believes the bees are vital to helping keep the city green.

 

“Our bees pollinate, and they clean the air. It is a way to connect with nature,” he said.

 

Bees also produce around 100 pounds of honey per hive per year, he said — honey that he sells at the city’s various farmer’s markets.

 

Cote said he has received several requests to instal rooftop beehives, and the demand is such that on Sunday he is scheduled to offer a course for aspiring apiculturalists.

 

On the other side of Manhattan, in the posh Upper East Side, Eli Zabar, owner of the upscale “Vinegar Factory” delicatessen, inspects the crops he is growing on the roof of the old factory bought in 1991.

 

“I began the green houses 15 years ago,” Zabar told AFP. “I grow heirloom tomatoes, lots of different kinds of lettuce, herbs, basil, rosemary, thyme, raspberries, figs, beets. We use the heat of the bakeries and pastries, we recycle the heat. With the use of the heat we have eliminated our (carbon) footprint.

 

“You harvest in the morning, you sell in the afternoon, you don’t refrigerate, it tastes better,” said Zabar. “We pick everything ripe and ready to eat. All our products here are organic.”

 

Depending on the hour of the time of day, Zabar says with a smile, “the green houses smell of bread, brownie or croissant.”

 

About half of the items Zabar sells in his deli comes from rooftop farms.

 

From Manhattan to Brooklyn, whether on rooftops, backyards or in any of the city’s 600 community gardens, urban farming is a growing phenomenon.

 

The movement is helped along by Mayor Michael Bloomberg, who seeks to turn the city into a sustainable development champion. Through “PlaNYC 2030,” a programme he launched on Earth Day 2007, people who instal “green roofs” can get a tax break.

 

At Randall’s Island, in New York’s East River, the city’s Parks and Recreation Department is currently testing 16 different types of vegetation that could be placed on the roofs of schools, hospitals or other public buildings.

 

“These are patches of succulent vegetation, like sedum, which protect the roofs, (and) isolate the buildings from the heat because the UV (ultra-violet) sun is not hitting,” said senior project manager John Robilotti.

 

The rooftop vegetation also helps maintain a steady temperature inside and captures storm water, which would otherwise run off into the street.

 

“The water that does come out is filtered and kept in tanks, and we use it to water when there is no rain,” Robilotti said.

 

The roofs “absorb carbon and create oxygen, so we take carbon from the carbon cycle.

 

“And they attract birds, butterflies, bees. We even saw a red-tailed hawk,” he said.

 

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Churches to conduct Blessing of the Tractors

 

(lexch.com) – Sunday church services always include blessings and prayers, but for the next two weekends, two local (Lexington, Nebraska) Lutheran Churches will be offering prayers directed toward the agriculture sector of the community

 

Pastor of Emmanuel Lutheran Church and St. Paul's Lutheran Church, Steve Hetzel, said on April 25 and May 2, the churches will be holding a Blessing of the Tractors, which also includes special blessing for farmers, gardeners, seeds and the soil.

 

"On Sunday, April 25, we will hold one here (at Emmanuel Lutheran) during our normal worship time at 10:30 a.m.," said Hetzel. "The one here in town is going to be more of a garden-type thing as opposed to field work."

 

However, on May 2 at the rural St. Paul's Lutheran Church, Hetzel said the service begins at 9 a.m. and will be held outside if the weather permits.

 

"Out in the country we do have plans on having four or five tractors and some seed and soil," he said. "It should be a lot of fun."

 

Hetzel said the idea of blessing tractors, farmers, gardeners, soil and seed, came from a parishioner who had seen the event occur elsewhere.

 

"She asked if we could do it here and I said, 'We sure can.'"

 

The point of the special blessings is to pray for a successful and most importantly, safe, growing season, whether it be a vast cornfield or a small urban garden he explained.

 

"I'll preach on trusting God as we plant, we trust God will give us a good harvest, a fair price for our labor and keep the farmer safe in his or her work," said Hetzel. "The children's sermon will be on planting seeds and the wisdom of God."

 

Those interested in attending don't need to be Lutherans or members of the Emmanuel or St. Paul's Church. Since the St. Paul's blessing will be held outdoors, those in attendance will need to bring lawn chairs.

 

"Anybody is welcome to attend," said Hetzel.

 

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