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---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 10/02/2000 
12:02 PM ---------------------------
   
	
	
	From:  George McClellan                           10/01/2000 02:36 PM
	

To: Mike McConnell/HOU/ECT@ECT
cc: Jeffrey A Shankman/HOU/ECT@ECT, Stuart Staley/LON/ECT@ECT, Joseph P 
Hirl/AP/ENRON@ENRON 
Subject: Japan - Asia markets

Mike - 

Thanks for your voice mail of Friday regarding your trip to Tokyo.  As we 
have discussed we are in the process of identifying a strategy and forming a 
team to lead our Asian coal efforts.  

We view continental Europe and Japan / Asia as the next areas of growth for 
our group.  One of our greatest challenges has been identifying and 
attracting to our group the best "Enron" people, and strong industry 
players.  We have made some progress with the recent addition in Houston of 3 
- excellent mid-marketers with industry backgrounds.  However we are still in 
the process of building a strong European organization, and staffing Sydney 
with a core group of Enron traders and industry mid-marketers.  

Clearly Japan represents the single largest market for coal in Asia.  The 
other major markets are Taiwan, Korea, Hong Kong and to a degree India.  The 
largest coal exporters in the region are Australia, Indonesia, China and 
Russia.  Our staffing strategy for Asia is to initially build a core trading 
and marketing group centered around 2 - 3 experienced "Enron" guys in Sydney, 
add  mid-marketers with industry experience in Sydney and Tokyo, and hire  2 
- locals in China to look after our deliveries from PRC suppliers.  

Our experience to date has shown that industry guys orphaned in a regional 
office face certain failure. As a result we are trying to avoid the mistake 
we have made in the past of hiring local industry players, and then failing 
to provide them with proper direction and support. 

We are on target to relocate at least 2 - "Enron" guys to Sydney by Jan - 
Feb.  We will continue to search for strong industry guys in Sydney, and make 
any necessary changes to our existing structure there.  We have not yet 
started to identify qualified people with industry experience in Tokyo - but 
will obviously do so.  I will get with Stu and Joe to discuss using a local 
head-hunter, and advertising in trade journals etc.

We share your views on our potential for growth in Asia and Japan, and are 
working to put a team in place that will be focused on developing a strongly 
competitive, sustainable  business in the region.  Our initial goal is to 
develop Asia to the point where Sydney is running it's own books for both 
coal and freight, and we are a major supplier in the region.

Stu and I will be in Hong Kong and Beijing Oct.  7 - 11 to meet with the 
Chairman of Shenua Coal, and senior management of Shanxi Coal, China Light & 
Power, and Hong Kong Electric.  The primary purpose of the trip is to 
encourage Shenua to perform in accordance with their obligations under our 
supply agreement; introduce ourselves to Shanxi; assure CLP that we will 
perform under our term sales agreement; and start negotiations with HKE for a 
term sales contract.

I will coordinate my schedule with Joe, and will spend a few days in Tokyo 
(Oct. 12 - 13) at the end of the PRC trip.  We can coordinate our efforts, 
put a time line in place for staffing the Tokyo office with qualified coal 
guys, and discuss our overall strategy for entering the Japanese market.

I will be in the office Mon. - Weds., and am available to meet with you and 
Jeff to discuss the above at your convenience. 

 Thanks,

George