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U.S. Company on How to Go Broke Despite Dominating Vodka Sales in Russia; The company’s unlikely troubles show how timing and local knowledge are crucial

U.S. Company on How to Go Broke Selling Vodka in Russia

Going broke while dominating vodka sales in Russia and Poland may seem tough to do. A company founded by a Florida golfer, listed on Nasdaq Stock Market and until recently based in New Jersey, is almost there.

Unable to repay $258 million in bonds due last month, Central European Distribution Corp. (CEDC), which owns vodka brands including Bols, Zubrowka and Parliament and once imported Dom Perignon to Russia, is preparing to file for bankruptcy. Creditors will vote by April 4 on a restructuring plan that would hand CEDC to Russian billionaire Roustam Tariko, solidifying his control of the distiller and distributor he’s toyed with for years.

The company’s unlikely troubles show how timing and local knowledge are crucial. After almost two decades of success in Poland, CEDC expanded into Russia via acquisitions just as Poles began drinking less vodka and the Russian government raised taxes and costs to discourage alcohol consumption. The global financial crisis, a 37 percent collapse in Russia’s currency, and accounting errors that followed didn’t help either.

“If we had to do it over, we probably should have bought one company to see how it went, rather than buying three within six months,” CEDC co-founder William V. Carey, who resigned in July as chief executive officer, said in a phone interview from Warsaw, where he still lives. Russia’s “new regulations weren’t there when we invested, making it much more difficult to manage growth and profitability over the last three years.” Read more of this post

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App makers say a growing group of “cloners” are mimicking their products or misappropriating their names and images to ride an original app’s success

Updated March 4, 2013, 8:05 p.m. ET

Clone Wars Roil App World

By AMIR EFRATI

In the fast-paced mobile-apps business, creating a hit app is no guarantee of success: Developers must also fend off the copycats.

App makers say a growing group of “cloners” are mimicking their products or misappropriating their names and images to ride an original app’s success.

The copycats often target top-selling apps and seek to siphon off users and potential revenue. Others carry malicious software. Despite their proliferation, app stores run by GoogleInc. GOOG -0.84% and others have been unable to weed them out.

Consider the experience of WhatsApp Inc., a Mountain View, Calif., company that makes a mobile-messaging app that has been downloaded hundreds of millions of times since its 2009 launch. After WhatsApp reached the top of the app-store rankings, WhatsApp employees noticed that other apps were hijacking its name to ride its coattails.

Today in Google’s app store, alleged WhatsApp clones include “Whatsapp Nearby,” “Whatsapp Friends,” and “Whatsapp Add Me”—none of which were made by WhatsApp but which allow users to contact each other and make new friends. Those three apps, which were made by the same developer, have been downloaded hundreds of thousands of times. The developer denies they are copycats. Read more of this post

Taiwan asset managers under scrutiny on suspicion of insider trading, manipulation of stock prices and breach of trust from 2010-2012 and profiting from state fund trades

Taiwan asset managers under scrutiny for profiting from state fund trades
(32 mins ago)

Taiwan prosecutors said they launched an investigation into alleged wrongdoing by fund managers at two securities firms that caused massive losses to a government fund.
Prosecutors raided the firms and questioned eight people on suspicion of insider trading, manipulation of stock prices and breach of trust from 2010-2012, they said in a statement yesterday. The suspects actions allegedly resulted in more than T$1 billion (US$34.5 million) in losses to the government while allowing them to make illegal profits of nearly T$100 million on the stock market, AFP reports.  Taiwan’s financial regulators started reviewing 13 securities firms trusted with handling government investment funds after a similar case surfaced late last year.

Advice from a leading industrialist: Be diligent, Be honest, Be frugal; “Corruption comes from greed and is encouraged because people respect the rich even if their dirty money comes from corruption and bribery. According to Buddhist teaching, we should have hiri and ottappa, or shame and fear of doing evil. If we show respect to corrupt people, it will further encourage the wrong attitude towards corruption.”

Advice from a leading industrialist: Be diligent, Be honest, Be frugal

Published: 4 Apr 2013 at 00.00

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The visitor to the headquarters of Kulthorn Kirby Plc (KKC) can’t help but notice the big sign hanging in the main lobby, which declares “Be Diligent _ Be Honest _ Be Frugal”.

“It’s also my personal motto,” says Suraporn Simakulthorn, the executive chairman of KKC, the major SET-listed maker of air-conditioner compressor motors and refrigeration product equipment.

“I started my career with the Telephone Organisation of Thailand back in 1963, then moved to work at Ericsson in 1967 for 13 years,” he explains. “Learning from my own personal experience, I believe we must be diligent and have a conviction to get the job done.

“Honesty is second to none when you work with others. In our 32-year history at Kulthorn Kirby, we’ve gone through a number of cooperative ventures with partners including Western and Asian counterparts. Honesty is the key element in business achievement.

“Last but not least is being frugal, which is similar to something we are well aware of, the ‘self-sufficient economy’. Since I used to be a corporate employee myself, I am truly aware of the importance of saving. We have to behave in a way that we spend only what is necessary and keep some savings at all times.” Read more of this post

Isaac Newton’s Nightmare During the South Sea Stock Bubble (Dec 1718 – Dec 1721)

Isaac Newton’s Nightmare — Charted By Marc Faber

Sam Ro | Apr. 2, 2013, 4:43 PM | 6,414 | 3

The parabolic move in Bitcoin prices has us thinking about some of the most notorious asset bubbles in history. We were thumbing through some of Jeremy Grantham‘s old research and saw this great chart from Marc Faber. “I can calculate the movement of stars, but not the madness of men,” Newton apparently said after he lost his fortune.

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Bond Traders Club Loses Cachet in Most Important Market; In the same way technology eroded the middleman role once played by travel agents and stock-market specialists, increased use of the direct-bidding system threatens government-bond traders

Bond Traders Club Loses Cachet in Most Important Market

Primary dealers, the select group of banks and brokers that have held a seat at the center of the U.S. government debt market since 1960, are losing influence.

More than 20 percent of the $538 billion of Treasury notes auctioned this year have been awarded to bidders who bypassed the dealers by using a website to place their orders, according to data provided by the U.S. Treasury Department. That’s almost double the 2011 level and up from 5.6 percent in 2009.

In the same way technology eroded the middleman role once played by travel agents and stock-market specialists, increased use of the direct-bidding system threatens government-bond traders at firms ranging from Bank of America Corp. to UBS AG. (UBSN) It also has eaten into profits from a business that’s among the least affected by the regulatory changes and new capital requirements reshaping the industry.

“You’ll see clients do a lot more things in a self- sufficient manner than they used to do before,” said Richard Prager, global head of trading at BlackRock Inc. (BLK), the world’s largest asset manager with $3.8 trillion. “It’s just the realities of today.” Read more of this post

Is Innovation Killing the Soap Business? New products ought to expand the revenue pie for manufacturers and retailers, not shrink it

Updated April 3, 2013, 7:51 p.m. ET

Is Innovation Killing the Soap Business?

By PAUL ZIOBRO and SERENA NG

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The laundry-soap business has a problem—it is shrinking—thanks to premeasured pod detergents from Procter & Gamble Co. PG -1.06% and others that keep consumers from overdosing. For years, consumer-product makers could count on extra sales from shoppers who poured in too much detergent with every load. The phenomenon became more pronounced when manufacturers rolled out increasingly concentrated detergent.

But the bubble burst when P&G introduced its new laundry product—Tide Pods capsules—which fixed the amount of detergent used per wash and ushered in the era of “unit dose” products. Total U.S. sales of laundry detergents fell 2.1% in the 12 months to March, according to market-information firm Nielsen, whose data excludes sales from Costco Wholesale Corp. COST -1.23% and some other retailers. Compared with the pre-pod age three years ago, detergent sales are down 5.1% in dollar terms, to $7.06 billion from $7.44 billion. The sales downturn has set off an unusually frank debate in the industry over when innovation goes too far, and it has led to finger-pointing about who might be at fault. James Craigie, the outspoken chief executive of Church & Dwight Co., CHD -0.90% which sells low-price detergents under the Arm & Hammer and Xtra brands, has an answer: P&G.

“Pod is killing the laundry detergent category,” Mr. Craigie said at an industry conference in February.

New products ought to expand the revenue pie for manufacturers and retailers, not shrink it, he said. That is what innovation always did in the past, he said. The last round of more-concentrated liquid, in 2008, drove laundry detergent sales up 5%, he said. At the same conference,Clorox Co. CLX -2.43% noted that concentrated bleach helped lift overall bleach sales, a fact that Mr. Craigie reiterated. Read more of this post

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