Kenyans Get Taste for Homemade Teas

Gold Crown’s locally produced premium brand makes inroads against foreign rivals 

MOMBASA, Kenya—This nation exports more tea than any other in the world, but for years Kenyans weren’t able to enjoy a cup of premium tea cultivated in their own country. One company is leading a movement to change that.

Kenya annually exports roughly 400,000 tons of tea, ahead of other leading producers such as China and India. But high-quality tea was widely viewed as a luxury here, and for decades few Kenyans drank it. About 5% of Kenya’s tea crop stays in the country, much of it dust and residue from higher-quality leaves sold and processed abroad, and many Kenyans use it to make the hot, milky brew known as chai.

In recent years, however, a locally produced premium brand has appeared, shelved in supermarkets next to the 400 shilling ($4) packs of Unilever PLC’s Lipton and Associated British Foods PLC’s Twinings, which are both made with Kenyan tea abroad and re-imported.

bn-si608_kenyat_p_20170303145317An employee shows off a tea leaf at the Maramba tea plantation in Limuru, Kenya, about 20 miles northwest of Nairobi. The leaf will be dried, cut and packed before it is auctioned in Mombasa.

Gold Crown Beverages Ltd., a family-held business incorporated in the U.K. but with a base here in Kenya’s biggest port city, is selling premium black and herbal teas, made by Kenyans for Kenyans, at roughly half the price of foreign competitors. The company’s Kenyan sales, $9 million in 2016, have almost tripled since 2012.

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Gold Crown has managed to establish a product that doesn’t rely on exporting raw materials and importing processed goods, a feat that has long eluded most African companies. Cocoa producers in Ivory Coast and Ghana have for decades failed to produce a competitive brand of African-made chocolate. Oil producers in Nigeria and Angola have struggled to refine and process their own petroleum products.

The Food and Agriculture Organization of the United Nations has urged Kenya to go further than just exporting tea and add more value to the commodity at home.

“There exists an enormous blue-sky opportunity to roll out higher-quality tea like purple tea too,” said Aly-Khan Satchu, a Kenyan financier and investor, who referred to rare tea grown here that turns the water purple when brewed.

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Trump Poised to Push Nafta Changes

While an abrupt withdrawal from Nafta trade deal is unlikely, the president-elect and his advisers are gunning for big changes.

Rather than kill Nafta, Donald Trump and his advisers appear set to push for substantial changes to the treaty governing U.S. trade with Mexico and Canada, an effort that could prove difficult to negotiate and perilous to the regional economy.

The president-elect vilified the North American Free Trade Agreement during the campaign and threatened to pull the U.S. out of the trade deal—but only if Mexico doesn’t agree to substantial modifications.

The U.S. trade deficit with Mexico rose 9.5% in 2015 to $60.7 billion, while the deficit with Canada fell 57% to $15.5 billion.

Mr. Trump hasn’t released a blueprint for his new vision of Nafta, but his comments and those of his advisers suggest they want big changes. Among the likeliest would be special tariffs or other barriers to reduce the U.S. trade deficit with Mexico and new taxes that would hit U.S. firms that moved production there, according to Trump advisers. His team says it may also seek to remove a Nafta provision that allows Mexican and Canadian companies to challenge U.S. regulations outside the court system.

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Amazon Shoots for Top Spot in India

Amazon founder is telling executives to ‘do what it takes to succeed’ in India

NEW DELHI– Amazon.com Inc. founder Jeff Bezos, perturbed by his company’s failure to capture much of the massive Chinese market, had a pointed message for executives in India during a visit in 2014: Don’t let that happen here.

Do what it takes to succeed and don’t worry about the cost, Mr. Bezos said, according to a person who was present.

Amazon, which dominates online selling in the U.S. but so far has gained little traction in developing countries, has since invested billions of dollars to build a logistics network spanning India to reel in shoppers.

The result: the company rapidly became India’s No. 2 e-commerce player and moved within striking distance of local rival Flipkart Internet Pvt., according to some estimates. Indeed, Mr. Bezos last month declared Amazon was on top in a market it largely had ignored until recent years, though he didn’t say by which measure.

“We are winning in India,” Mr. Bezos said at a conference in San Francisco, arguing that Amazon has pulled past Flipkart to become “the leader in India now.”

Amazon’s attempts to push into developing markets—marked by difficult logistics and significant cultural differences in shoppers’ expectations—reflect the e-commerce giant’s search for new routes to growth as it saturates the U.S. market. Countries such as China and India promise rapidly growing populations with steep rates of online shopping adoption as technology becomes more accessible.

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Trump Victory Shakes Businesses

President-elect’s stance on trade, infrastructure and taxes reshapes firms’ prospects.

By Ted Mann, Bradley Olson and Andrew Tangel

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Executives world-wide encountered a political and economic landscape radically changed by Donald Trump’s surprise election, which reverberated through the energy, health-care and manufacturing sectors.

U.S. businesses braced for revamped trade pacts and a potential crackdown on overseas operations, coupled with the promise of lower taxes, lighter regulation and higher infrastructure spending at home. Executives in Asia and Europe said they were hopeful their close ties with the U.S. economy would endure the political upheaval and heated campaign rhetoric.

For the energy industry, Mr. Trump’s victory fanned expectations that he would clear the path for new pipelines, end U.S. participation in global climate change pacts and undo environmental regulations to boost American coal mining.

Scott Sheffield, CEO of Pioneer Natural Resources Co., said Mr. Trump would perk up the country’s stagnant drilling boom by making it easier to build pipelines that unlock areas rich in oil and gas. “His message about creating jobs is why he broke the blue wall” and attracted votes from Democrats in some states, Mr. Sheffield said.

Continental Resources Inc. chief Harold Hamm, Mr. Trump’s chief adviser on energy issues, said subsidies for renewable energy like solar and wind, and credits for electric cars, should be eliminated. “None of it should be subsidized, none of it,” Mr. Hamm said Wednesday. “If it makes it in the market, fine.”

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Americans Embrace a Made-in-China Buick SUV

GM’s Buick Envision is meeting its low-volume goal, and U.S. dealers want more of the $40,000 car.

Greg Shafer ended a lifelong streak of buying U.S.-made cars when in August the 53-year-old drove out of a Columbus, Ohio, dealership behind the wheel of a Buick Envision.

His $40,000 sport-utility vehicle is one of the first cars to be sold in America that was built in China. Mr. Shafer decided its provenance wasn’t an issue because “once you drive it and experience all the features, it feels far from a made-in-China car.”

As the U.S. auto industry’s rising reliance on Mexican car factories becomes a hot topic in the 2016 presidential election, customers like Mr. Shafer are delivering a boost to General Motors Co.’s made-in-China strategy.

The No.1 U.S. auto maker in terms of sales started selling the Chinese-built Buick Envision in North American dealerships in late spring, importing relatively small numbers of the vehicles to give a boost to the Buick brand. A few months into the experiment, dealers are clamoring for more because they say most of their customers don’t care where the vehicle is made.

“There has been very little pushback,” said Chris Haydocy, co-owner of the Haydocy Buick GMC in Columbus, where Mr. Shafer bought his SUV. “Most people realize the world is flat now.

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Buick Envision SUVs are lined up at Yantai Port in China last December before being loaded on a freighter for the journey to the U.S. PHOTO: VCG VIA GETTY IMAGES

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Globalization on the Skids

Global finance ministers and central bankers are descending on Washington this week with a central concern in mind: fear that the modern age of globalization is hitting a wall.

Last year’s $646 billion in foreign direct investment in rich economies represents a 40% drop from the peak before the financial crisis. International lending, as measured by cross-border banking claims at the Bank for International Settlements, is down nearly $2.6 trillion, or 9%, over the past two years.

International trade this year will grow at the slowest pace since 2007, according to the World Trade Organization, which has slashed its forecast for growth in global trade volumes to 1.7% in 2016 from a previous estimate in April of 2.8%. Imports among the world’s 20 largest economies have fallen as a share of their gross domestic product for four consecutive years, and growth in demand for shipping containers fell to 4% this year after four decades of double-digit expansion.

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Containers at the Yangshan Deep Water Port in Shanghai, China, last month. PHOTO:ALY SONG/REUTERS

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Aircraft Subsidy War Escalates

EU Failed to Cut Off Illegal Subsidies to Airbus, WTO Rules

The U.S. claims ‘sweeping victory’ in protracted trade dispute, but the battle appears far from over

The ruling moves the U.S. one step closer to being able to impose more than $5 billion in annual tariffs against goods and services from the European Union as soon as next year, according to U.S.

The WTO said in a 574-page report that the EU and some of its member states “failed to comply” with an earlier ruling to remove the subsidies or void their effect to Airbus. EU compliance efforts fell short, the WTO said.

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ENLARGE

An Airbus A350XWB, the company’s newest long-range jetliner, is shown in a 2014 demonstration flight. The WTO found Thursday that the plane’s development was bolstered by illegal subsidies from the EU. PHOTO: REUTERS

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Merger to Create Global Fertilizer Giant

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TORONTO—Canadian fertilizer giants Agrium Inc. and Potash Corp. of Saskatchewan Inc. confirmed plans to merge on Monday, in a deal that would create a crop-nutrient giant valued at about $27 billion.

Joining forces with Agrium offers Saskatchewan-based Potash, the world’s largest fertilizer producer by capacity, protection against volatile fertilizer prices, through Agrium’s steadier retail network. That system also would lower Potash’s distribution costs, while expanding fertilizer sales.

Agrium’s retail arm, North America’s biggest for fertilizer, seeds and equipment, generates the bulk of the Calgary-based company’s sales. For Agrium, the deal would bolster its volume of potash and other fertilizer ingredients.

                                                 To read the complete article, please visit wsj.com

An Oil Kingdom Plans to Wean Itself From Oil

An Oil Kingdom Plans to Wean Itself From Oil

RIYADH—Saudi Arabia unveiled plans to free the kingdom from its dependence on oil revenues, in part by selling a stake in its state-owned oil company and creating the world’s largest sovereign-wealth fund.

The move represents an ambitious attempt to lay out a new economic trajectory for the country in an era of cheap oil. It is the brainchild of Deputy Crown Prince Mohammed bin Salman, the 30-year-old son of King Salman, who was entrusted by his father to oversee what are likely to be jarring changes in the kingdom.

“By 2020, we’ll be able to live without oil,” Prince Mohammed told Saudi-owned news channel Al Arabiya in an interview aired Monday. A detailed package of reforms included in the plan is expected to be released in six weeks.

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IKEA’s India Bet Runs Into Thicket of Rules

Law requiring foreign retailers to acquire products locally slows expansion; red tape, few labor laws

Updated Feb. 23, 2016 5:34 p.m. ET

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BHADOHI, India—Swedish retailer IKEA wants to sell its flat-pack dining tables, cotton dish towels and Scandinavian-sounding sofas to India’s blossoming middle class. Under Indian law, roughly one-third of those items must be made locally, and that is proving a formidable obstacle.

IKEA has scoured the country for new products that meet its standards and come up nearly empty-handed. Laminated table tops from Indian suppliers…

To read the complete article, please visit wsj.com