Investing in ASEAN Association of Southeast Asian Nations asean C 2021 2022 M | Y CM MY CY CMY • one vision • one identity • one community • K | Brunei Darussalam | Cambodia | Indonesia | Lao PDR | Malaysia | | Myanmar | Philippines | Singapore | Thailand | Vietnam | Helping you succeed in Asia TIONS A Contents N N A Introduction SI A ST Southeast Asia is increasingly attractive to foreign investors 5 A Messages OUTHE US-ASEAN Business Council 7 S OF UK-ASEAN Business Council 8 EU-ASEAN Business Council 9 TION Business - Finance - Advisory A Seeking the light: ASEAN 2021|2022 – HSBC 12 SSOCI How to (not) fail in ASEAN – ASEAN Business Partners 15 A Global Upside makes expansion easier for growing businesses – Global Upside Corporation 20 Reframing for growth and building a better working world post-pandemic – EY 22 Maximising opportunities in ASEAN in post pandemic world – EY 25 Financial technology is rapidly changing banking in the region 28 Future-proofing ASEAN’s financial services industry - SWIFT 32 Recruiting the best talent to help your ASEAN business grow – Globalization Partners 35 Supporting UK companies in ASEAN – British Chamber of Commerce Singapore 39 Supporting business expansion across the ASEAN region – Mauve Group 42 Healthcare - Life Sciences - Pharmaceuticals Pandemic hastens adoption of digital technologies for healthcare provision 45 The hidden pandemic in ASEAN – Novo Nordisk 49 Life sciences set to be fastest growing manufacturing sector 52 Manufacturing Manufacturing advances technology for global role 55 Robert Bosch: “Like a Bosch” Sustainable “Like a Bosch” – Robert Bosch 59 Infrastructure Transport upgrades accelerate 62 Logistics GEODIS offers comprehensive logistics solutions across the ASEAN region – GEODIS 68 Innovative technology to enhance logistics 71 Agriculture Future of agriculture will depend on new IT solutions 73 BASF: We create chemistry Sustainability is at the heart of chemical giant’s strategy growth – BASF Southeast Asia 77 Renewables Renewables take centre stage in energy strategy 80 00 ASSOCIATION OF SOUTHEAST ASIAN NATIONS Water ASEAN embraces innovation to tackle water challenges 83 Diageo: The spirit of progress The spirit of progress: Doing business the right way – Diageo 86 Tourism Striving to rebuild tourism industry on sustainable basis 90 Retail & Consumer Lifestyle changes propel consumer markets 93 Education Opportunities grow for foreign investment in education sector 96 Defence & Security Risks to business in the ASEAN region – Hill & Associates 100 Region continues to enhance defence capabilities 102 Useful contacts 106 Copyright ©Allurentis Limited 2021. All rights reserved. Allurentis is delighted to have been involved in partnership with ASEAN on this, the ninth publication and would like to thank all sponsoring organisations for their kind contributions. We are confident that it will raise awareness with all readers and prove to be an invaluable resource, especially for those wishing to become involved in the extraordinary business opportunities and growth prospects within the region. Electronic copies of this publication may be downloaded from Allurentis Limited’s website at www.allurentis.com, provided that the use of any copy so downloaded, complies with the terms and conditions specified on the website. Except as expressly stated above, no part of this publication may be copied, reproduced, stored or transmitted in any form or by any means without the prior permission in writing from Allurentis Limited. To enquire about obtaining permission for uses other than those permitted above, please contact Allurentis by sending an email to [email protected] | ASEAN Business Partners | BASF | Diageo | EY | GEODIS | Global Upside | Globalization Partners | | Hill & Associates | HSBC | Mauve Group | Novo Nordisk | Robert Bosch | SWIFT | Photos courtesy of: www.istockphoto.com | www.123rf.com | www.shutterstock.com 00 NTRODUCTION Southeast Asia is increasingly I attractive to foreign investors Mitigating the social and economic effects of the Covid-19 pandemic has decline of 14% on the previous year it represented the largest FDI inflow been the principal focus since the beginning of 2020. ASEAN’s experience of any emerging market region, according to UNCTAD’s 2020 Investment with past pandemics including SARS, Avian and Swine influenzas, have Trends Monitor. led them to activate earlier planned preparedness protocols. A key reason is that a combination of rising labour costs, supply chain At the beginning of January 2020, four days after China’s notification concerns and geopolitical tensions are driving multinational companies to the World Health Organisation (WHO), ASEAN’s Secretariat alerted to relocate a growing proportion of their manufacturing from China to senior health officials to the unfolding emergency. ASEAN countries. Governments have therefore been able to work collectively to strengthen FDI growth has been driven by strong investment mainly in Singapore, their pandemic response plans and address the dual challenges of Indonesia and Vietnam, with these three countries receiving more than resuming business activity while keeping people safe. 80% of inflows in 2019, according to UNCTAD. Vietnam while recording a 10% fall still received some US$20 billion of investment. Vietnam, for example, is one of the very few countries worldwide to have recorded positive economic results over 2020 with predicted GDP ASEAN offers many long term incentives to investors, not least since it is growth of 2.3%. The Philippines, though normally one of the smaller recognised as an area of increasing geostrategic importance as political, recipients of FDI, witnessed a near 30% rise in investment by a diverse military and economic power shifts steadily towards the region. range of Japanese, Dutch, American and Singaporean firms. All countries are deploying the Association’s Single Window, where The dilemma for all governments is keeping further waves of infections trade and cargo flows can be hugely accelerated as trade information at bay while bringing both economic and social activities back to a high is processed by computer linked systems. Singapore, Thailand, Vietnam, degree of normality. Southeast Asia is poised for economic recovery Malaysia, Cambodia and Lao PDR are also using the ASEAN online in 2021 with the rollout of Covid-19 vaccines and gradual opening up Customs Transit System to track goods. of global economies. The Asian Development Bank has estimated that The economic prospects have been further enhanced following the Southeast Asia’s GDP will expand 5.2% against a contraction of 4.4% Regional Comprehensive Partnership (RCEP) agreement signed in Hanoi in 2020. in November 2020. Therefore, ASEAN is again on course to become the world’s largest Once it is ratified, the landmark agreement will link ASEAN with China, single market by 2030. This is reflected in the investment flows that have South Korea, Japan, Australia and New Zealand, a group of countries continued at a high level. with a combined population of 2.3 billion, into the world’s largest free- In 2020, despite the severe effects on the global economy, ASEAN trade agreement. The trade deal covers 30% of global GDP and 28% of received US$70 billion in new investments. Even though this was a the world’s trade. ASEAN countries are expected to benefit significantly 00 5 ASSOCIATION OF SOUTHEAST ASIAN NATIONS from RCEP, potentially by up to US$19 billion per year by 2030, according to the Brookings Institution. Alongside the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP), these agreements will ensure substantial growth. They promise to achieve a positive evolution in global and regional economic progress and underpin the resumption of strong long term economic growth in ASEAN countries. ASEAN continues to enhance its credentials in the global economy. The World Economic Forum’s annual meeting to be held in Singapore in August 2021, will bring together leaders from around the world meeting in person for the first time since the pandemic. ASEAN countries will have the platform to present the unique investment opportunities offered in a multitude of sectors set to drive trade and investment over the next decade and beyond. The Covid-19 crisis has served to further push many of the technological shifts that were already apparent prior to the pandemic, particularly in terms of digital transformation ranging from the provision of healthcare services to online purchases and payments. Malaysia has secured orders from AstraZeneca, Pfizer-BioNTech and the global COVAX Facility backed by the WHO, and is negotiating with In 2020, Thailand announced its plan to promote itself as the region’s other potential suppliers as it plans to inoculate 80% of its population. electric vehicle hub, by manufacturing 250,000 electrically powered vehicles by 2025 and increasing to 750,000 units by 2030, representing Elsewhere the Philippines has allocated US$1.72 billion to purchase 30% of total vehicle production in the country. Singapore has already 148 million doses of vaccines from pharma companies including become a leading technology hub and its sector is set to grow further AstraZeneca, Sinovac and from India’s Serium Institute of India. with more than 270 venture capital funds and 4,000 start-up tech Vietnam has ordered 30 million vaccine doses from AstraZeneca and is companies located there. also developing its own vaccine. Although health security remains a huge challenge, the region is A huge boost has come with the decision by the Quadrilateral Security stepping up its efforts to meet this. Singapore became the first country Dialogue (QSD), a strategic forum which groups the US, Australia, in Asia to receive a Covid-19 vaccine from Pfizer and BioNTech in India and Japan, to deliver one billion doses of the vaccine to ASEAN December 2020. Indonesia has partnered with China’s Sinovac Biotech countries by the end of 2022. The vaccine, expected to be Johnson & to produce Corona Vac vaccine and is also developing its own, while Johnson’s single jab, is due to be manufactured by India’s Biological acquiring further supplies from Novavax and AstraZeneca, with the aim E company.