Frost & Sullivan Analyst Briefing on Emerging Markets - ASEAN’s Growth Frontiers and Doors to AEC: Malaysia and Thailand
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• More female population in universities than male
• >50.0 per cent of female population have higher
graduated degrees
• AFTA (ASEAN Free Trade Areas) – 10
ASEAN countries
• ASEAN-China Free Trade Zone
• ASEAN Economic Community (AEC) to
be enacted in 2015
AEC is more than just free-trade areas but
integration of economic activities in the
region including investment – free flow of
capital and manpower, harmonization of
regulations
• New hard infrastructures are
underway
• More needs for imported know-hows
and foreign capitals
• Not only in BMA but also major cities
and areas connected to neighboring
countries
Source: Frost & Sullivan
25
Investor friendly Thailand sees a Surge of FDI Inflows
Source: Thailand Board of Investment and Frost &Sullivan
• More than 60.0 per cent of FDI is from Japan
• More than 60.0 percent of FDI are export-
focused manufacturing
• The top area of FDI is Electronic and
Electric as Thailand is the #1 hard-disk
producer of the world, dominated by
Western Digital and few other leading brands
FDI Applications and Combined FDI Value, Thailand,
2011 and 2012
26
Focus Industries
Healthcare
Chemicals and
Materials
Automotive
27
Thailand: High-Growth Sectors
Thailand is ASEAN’s
- Largest market for light commercial
vehicles (LMC)
- Largest exporter of tires
- Largest importer of Steel
Automotive
- Thailand, Singapore, and India are the top
destinations for medical tourism in Asia
(Source: Center for Medical Tourism
Research)
- Leading hospitals in Bangkok have at least
1/3 of expatriate patients Healthcare
- Largest local conglomerates like PTT and
SCG are strongly dominating this market.
Both are the Thai’s top-5 listed companies
- Both companies are investing in global
chemicals/biochem businesses and
research labs
Chemicals/
Materials
Toyota, Nissan, Isuzu, and
Honda all have long
established manufacturing
facilities in Thailand and
becoming hub of regional
and global exports
Bangkok General Hospital
and Bamrungrad Hospital are
the top 2 players with best-in-
class technology while
providing services like 5-star
hotels
PTT Chemical have vertically
expanded globally, esp. in
bio-chem, recently partnered
with a U.S. lab, Myriant
Technologies, to research &
develop green chemicals
Industry Snapshot Key Players
28
Malaysia
Functional Expertise
• Hazmi is the Vice President for Frost and Sullivan Asia Pacific with the portfolio of covering Malaysia Business and operation. He has been in the
business advisory and consultation industry since 2001.
• He also has the experience being on the client side, a government linked company (GLC) being part of the successful business transformation .
• His expertise lies in business and market intelligence and business transformation strategies. He sits in numerous project steering committees for
projects in the Asia Pacific region
Industry Expertise / Projects Undertaken
• Project steering committee member on a feasibility study on establishing a port in Malaysia. The feasibility on location, construction and operation of
the port and potential trade volumes and routes. The stakeholders included government ministries, state government and agencies.
• Project quality control supervisory team member for a manufacturing technology roadmap specifically for the electrical and electronic sector. The
roadmap entails developing a blueprint ,implementation strategies and financial assessment. The stakeholders included multinational companies, state
governments and agencies.
• Project team member of a baseline study for business and technology transformation blueprint for a Port Authority in the Middle East. The scope
covers international benchmarking with other ports, technology roadmap macro business process engineering and human capitol development
strategy.
• Project team member on a human capital supply demand study for the ICT Industry as part of the K workers Development Initiatives. The scope
covers corporate demographics, gaps in manpower supply and demand and overall manpower needs and Human Resource metrics for the next five
years.
Hazmi Yusof Vice President, Asia Pacific
Frost & Sullivan
Asia Pacific
Kuala Lumpur
Malaysia
Frost & Sullivan’s Regional Expert Commentary: Malaysia
29
30
Malaysia gains Visibility in Global Economy
Source: Reuters, Bloomberg and Frost & Sullivan
• Malaysia Tops the Asia IPO Market
for 2012
• Going Forward with Public-Private
Sector Partnership through its
National Transformation Program
31
Driven by Services, Malaysia is on a Growth
Trajectory
Source: ETP Annual Report 2011 and Frost & Sullivan
Key Indicators, Malaysia, 2010
Indicator (2010) Value
GDP ($ Billion) 238.00
GDP per capita $8,423
GDP (PPP), share of world
total
0.6%
Population 27.9 million
Growth is driven by consumption and investment
Sector Share (%)
Agriculture 7.3
Mining 7.0
Construction 27.6
Services 57.7
Composition of GDP, Malaysia, 2010
53.2
13.4
11.0
10.9 9.4
2.1
Private Consumption Public Consumption
Private Investment Public Investment
Net Trade Inventory
Demand-side Composition of GDP, Malaysia, 2010
Note: All values are in percent
32
Soft Infrastructure: Global Rankings are Evidence
of Malaysia’s Investment Attractiveness
Sources: World Economic Forum’s Global Competitiveness Report 2011, A.T. Kearney and Frost & Sullivan
FDI Confidence Indicators, Select Countries in APAC, 2010 and 2012
0
5
10
15
20
25
30
China India Singapore Indonesia Malaysia Vietnam Thailand Taiwan
FD
I C
on
fid
en
ce
In
dic
ato
r (R
an
k)
2010 2012
Rank moved up
Rank moved down
Ease of Doing Business, Select Countries in APAC, 2012 Global Competitiveness Index, Malaysia, 2009,
2010 and 2011
18
91
0 20 40 60 80 100
Hong Kong SAR, China
Korea Republic
Thailand
Malaysia
Japan
Taiwan,China
China
Regional Average (East Asia&Pacific)
Rank (out of 183 Countries)
Year Rank Trend
2009 24
2010 26
2011 21
33
Vision 2020 set to Propel Malaysia’s Economic
Development
High-Income
Target USD 15,000 GNI per capita by 2020
Sustainability
Meets present needs without compromising
future generations
Inclusiveness
Enables all communities to benefit from the wealth of the country
Quality of Life
Source: New Economic Model for Malaysia, 2010, Pemandu and Frost &
Sullivan
Objectives of Economic Transformation
Program, Malaysia, 2010 Onwards
Gross National
Income (GNI)
• Target $15,000 per capita
• USD523 billion GNI
• 6% GDP growth per annum
People/Jobs
• 31.6 million
population
• 3.3 million
additional jobs
Transformational
Actions
• 12 NKEAs
• 131 EPPs
• 60 BOs
• Transformational
approach
• Private sector led
Investment
• $444.00 billion investment
• 92% private investment
• 8% public investment
• 73% domestic direct investment
• 27% foreign direct investment
Targets for 2020
ETP Targets for Economic Development, Malaysia,
2020
34
Growth Drivers For Economic Transformation
National Key
Ecominc Areas
(NKEAs)
Tourism
Education
Agriculture
Communications Content and
Infrastructure (CCI)
Palm Oil
Healthcare
Wholesale and Retail
Electronics and Electrical (E&E)
Oil, Gas and Energy
Business Services
Greater Kuala Lumpur/Klang
Valley
Financial Services
Source: ETP, 2010 and Frost & Sullivan
12 Key Economic Areas (11 Industry Sectors + Greater Kuala Lumpur)
To kick start the
Economic
Transformation
Program.
Based on 10
year project that
targets high
income.
Private Sector
drives high
impact projects,
government
support through
policies and
incentives.
Target is high
income nation
by 2020
National Key Economic Areas, Malaysia, 2012
35
Focus Industries
• Oleochemical derivative products
• Food & health-based downstream
segments
• Bio fuels Palm Oil
• Health metropolis
• Health travel
• Develop medical hub
Healthcare Services
Tangible
based,
commodity
type export
Non-tangible
based,
services
related export
36
Urbanisation
Sustainable Source For Consumers
New Applications Demographics
Renewable Energy
Megatrends Impacting Opportunities in Palm Oil
• Bio Fuel to counter the rise of Crude Oil prices and its forecasted shortages
• Sustainable alternative fuel
• Byproduct converted to Biomass
• World urbanisation driving strong and increasing demand for energy and primary commodity such as food
• The forecast average world urbanisation rate in 2050 is 68.7 percentage points, an increase of approximately 18.2% from 2010.