Taiwanese firms focusing on Asean see Malaysia as a promising market for expansion
08 Sep 2021
Taiwanese companies focusing on Asean have identified Malaysia as among the top three most promising markets for further expansion in the next 12 months, according to a survey commissioned by Standard Chartered.
The survey among Taiwanese senior executives showed that Singapore, the Philippines and Malaysia offer the best expansion opportunities for sales and production among the major Asean economies.
A majority of Taiwanese companies are expecting business growth in the region over the next 12 months, Standard Chartered said in a statement.
A whopping 98% of respondents expect an increase in revenue while 93% anticipate growth in production, it said.
The respondents ranked access to the large and growing Asean consumer market (66%), presence of a mature and reliable supplier base (55%) and access to a global market enabled by a network of free trade agreements (52%) as the most important drivers for expansion into the region.
“In addition, the ratification of the Regional Comprehensive Economic Partnership (RCEP) is also expected to attract more investments into the region, with more than 90% of respondents planning to increase investments by at least 25% over the next three to five years (91%),” the statement said.
While optimistic about opportunities in Asean, Standard Chartered said the companies surveyed understand that there are risks that will need to be managed.
The top three identified risks are the Covid-19 pandemic or other health crises (75%), geopolitical uncertainty and trade conflicts (66%), and the slow revival of the economy and drop in consumer spending (61%).
Furthermore, respondents acknowledged that understanding regional regulations, payment methods and infrastructure (70%), building relationships with suppliers and adapting supply chain logistics (59%) and adapting their business model to industry practices and conditions within Asean (50%) are the most significant challenges in the next six to 12 months.
To drive resilient and rebalanced growth in Asean and to mitigate these risks and challenges, a majority of the respondents consider driving sustainability and environmental, social and governance (ESG) initiatives (70%), entering new partnerships/joint ventures to increase market presence (59%) and strengthening cybersecurity and data protection (50%) as the most important focus areas for their companies.
“To support their growth, these companies say they are seeking banking partners with extensive trade financing services (68%), strong cash management capabilities (48%) and foreign exchange hedging and comprehensive multi-currency settlement services (45%),” added Standard Chartered.
Standard Chartered Malaysia managing director and CEO Abrar A Anwar said Taiwan is a significant investor in Malaysia, mainly focusing on manufacturing industries such as electrical and electronics (E&E), biotechnology and high-technology related sectors.
“We believe more Taiwanese businesses will find Malaysia to be a highly attractive proposition, particularly for our growing capacity in major industries and segments such as chemical, high tech medical devices and biopharmaceuticals, and renewable energy — coupled with our key location as the manufacturing centre of Southeast Asia,” he said.
Kingshuk Ghoshal, the bank’s head of global subsidiaries in Singapore and Asean (corporate, commercial and institutional banking), said Taiwanese companies are active investors in various markets across Asean and will continue to be a key player in the region’s established and emerging sectors.
“Standard Chartered has been in Asean for more than 160 years. We are the only international bank with a presence in all 10 Asean markets with extensive local insights. Our unique global footprint and full suite of financing and advisory services make Standard Chartered the ideal banking partner to support these businesses’ cross-border financing and expansion needs,” he said.
The survey was commissioned in April, targeting senior executives at 44 companies based in Taiwan and focusing on the Taiwan-Asean corridor.
Source: NST
