Doing Business in Asia

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Presentation material from Finpro Growth Market seminar in Helsinki October 23 2012.

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Doing Business in Asia

  1. 1. Doing Business in AsiaJari Hietala
  2. 2. Finpro’s Global Network – Asia and Russia24/10/2012 © Finpro 2
  3. 3. Finpro’s Global Network – Australia, Malaysia, Philippines and Singapore24/10/2012 © Finpro 3
  4. 4. Finpro’s Network in China Sep 2009 © Finpro ry
  5. 5. FINCHI – a platform of optimizing your value in China entrance  Plug & Play style of equipped office space  State-of-art services assist your daily operation  Full access to local contacts and bussiness networking No Registration or Injection Capital needed, but all local activities could be realized with FinChi turn-key solution. www.finchi.cn10/24/2012 5 Copyright @ 2010 FinChi
  6. 6. FinChi Innovation Center - www.finchi.cn
  7. 7. The Importance of Asia For Finnish Companies24/10/2012 © Finpro 7
  8. 8. WORLD GDP 2050• According to Goldman Sachs, this is the most likely scenario of World GDP in 2050 – Note the position of Asian countries 2050
  9. 9. Asia and Finland in 2010 Asia and Middle East in 2010 1,6 1,4 The bubble size indicates GDP based on China PPP in 2010. The bubble size indicates also the countrys share of the total GDP 1,2 India of all countries included in the graph. Population (billions) 1 0,8 0,6 0,4 Indonesia 0,2 Japan Philippines Vietnam Thailand Korea Australia Singapore 0 -10 0 10 Malaysia 20 30 Finland 40 Hong 50 60 70 80 Kong -0,2 GDP based on PPP per capita (thousands) Source: IMF, World Economic Outlook, September 2011 Note: Amounts in current international dollar24/10/2012 © Finpro 9
  10. 10. Asia 2016 Asia and Middle East in 2016E 1,6 1,4 The bubble size indicates GDP based on China PPP in 2010. The bubble size indicates India also the countrys share of the total GDP 1,2 of all countries included in the graph. Population (billions) 1,0 0,8 0,6 0,4 Indonesia 0,2 Japan Saudi Hong VietnamPhilippines South Kong Thailand Arabia Singapore 0,0 Malaysia Korea Australia UAE -10 0 10 20 30 40 50 60 70 80 -0,2 GDP based on PPP per capita (thousands)Source: IMF, World Economic Outlook, Sept 2011Note: Amounts in current international dollar3/4/2012 © Finpro 10
  11. 11. Special Charasterics of Asian Markets• There is no one homogenous Asian market – analyze and select the right markets for your company and products• There is one common feature in all Asian markets: the Chinese business culture – it’s not what you know but who you know – invest to establish and maintain your personal contact network, Guanxi• There are a lot of so called “opportunistic” trading houses, which are eagerly looking for principals and suppliers from all over the world for example at trade fairs – It is not a big challenge to find a sales channel representative for any company – the real challenge is to get business going• Often the channel partners would like to represent your products in several markets in Asia. Watch out as this has very seldom proved to be successful• Verify your partners’ Guanxi• There are also several Finnish (and European) channel partners available – easy and safe option perhaps, but how does your end customer value them compared to truly local companies?• Asia is full of trading houses whose main sales argument is the price – it is challenging to find partners capable for value selling
  12. 12. Marine Cluster – East Asia • China – New vessels – Value added vessels • Cruise ships – Marine equipment manufacturing China’s evolving shipbuilding industry – Offshore oil & gas facilities “The shipbuilding industry has undergone vast • Bulk ships and container ships development during the 11th Five-Year Plan • Liquefied natural gas storage (2006-10). Chinese shipyards surpassed South tanks Korea to become the worlds top manufacturer in • Japan terms of new deliveries, new orders and outstanding orders” – Port development and re-building “The Chinese shipbuilding sector is reportedly on – Bulk ships and container ships the cusp of evolving - and seeking to increase the share of, for instance, container ships and liquefied • South Korea natural gas storage tanks” http://europe.chinadaily.com.cn/epaper/2012- – Ship ICT 05/11/content_15269649.htm – Arctic know-how – Green ship solutions such as eNavigation – Offshore equipment & components24/10/2012 © Finpro 12
  13. 13. Marine Cluster – South East Asia • Australia • Philippines – Commercial shipbuilding – Auxiliary equipment – Military naval vessels – Software and simulation systems – Repair sector – Design, port facilities, • Container ships, cruise liners etc management tools • Indonesia – Auxiliary equipment production • Singapore – Navy and Coast Guard – Electronics communication and – Port development and waterways navigation, automation precision development in general machining, and corrosion control – Ship IT, design, equipment for – Diesel engines and turbochargers shipyards, training software and – Ship design and consultancy, some offshore applications marine inspection and surveying – Modernization of production/management of large • Vietnam state owned shipyards – 5th biggest shipbuilding country in the world • Malaysia – Innovative design, power engineering and cutting edge technologies – Defence related sector, particularly the EW sector24/10/2012 © Finpro 13
  14. 14. Paper and Pulp Industry – East Asia • China – R&D and education Paper industry on track to grow “The countrys paper industry is poised for further – Chemical agents strategic growth this year under the ongoing framework of Chinas 12th Five-Year Plan (2011- – Electronics 2015), which encourages fundamental structural reforms to accelerate the industrys development.” – Metal manufacturing “The governments plan explicitly labeled the paper industry a new source of economic growth that – Transportation positively drives related businesses. The plan provides that Chinas paper industry should step up – Equipment manufacturing structural reforms in order to transform its paper enterprises into sustainable modern businesses.” – Packaging industry http://usa.chinadaily.com.cn/epaper/2012- 05/03/content_15198925.htm24/10/2012 © Finpro 14
  15. 15. Paper and Pulp Industry – South East Asia • Indonesia – Large existing P&P and forestry industry with well known players for Finnish suppliers. Upgrading and process improvements ongoing on several sites • Malaysia – Sarawak area cheap energy – Large scale pulp mills in the east – Technology suppliers • Vietnam – P&P industry lacking raw material – New small scale plantations profiligating – Equipment for mechanical wood working industry and some upgrading of the existing P&P facilities24/10/2012 © Finpro 15
  16. 16. Oil and Gas Industry – South East Asia • Australia • Philippines, Vietnam, Burma, – Skills and training Cambodia and Thailand have some – Infrastructure suppliers Oil and Gas industry – mostly for – Technology supplier domestic consumption – LNG projects – Transports and logistics • Singapore is a hub for many infrastructure multinationals and for design and also a location for supply companies • Indonesia to the industry – Offshore oil and gas production – Support equipment related Oil and gas might be the next big thing “Kuala Lumpur: In a report last week, CIMB Research said oil and gas companies are • Malaysia expected to post their record high earnings this – Engineering services year. Much of the research house optimism is tied to Petroliam Nasional Bhd’s (Petronas) plan to – Geotechnical resource centre boost output by developing new and marginal fields. As early as last mont, Petronas had – Energy efficiency announced that it plans to incest up to RM300 – Oil storage billion over the next five years, or up to RM60 billion a year, to develop new fields, and initiatives – Exploration to develop marginal fields“ http://www.btimes.com.my/Current_News/BTIMES /articles/ong29/Article/24/10/2012 © Finpro 16
  17. 17. Renewable Energy – East Asia • China • South Korea – Energy efficiency technologies – Solar cells – ESCO / EMC business in process industry – Windmills – Recycling and waste – Smart grid management – Lithium batteries – Advanced nuclear energy – Biomass – Re-forestation and sustainable use of forests – Wind energy Winds of change blow through China “Worlds biggest polluter spends £4bn a year on wind – Solar power and solar power generation in single region as it aims – Hybrid and pure electric vehicles to cut fossil fuel use.” – Heat pump technologies “Jiuquan alone now has the capacity to generate • Heat sources: waste heat, 6GW of wind energy – roughly equivalent to that of water, ground, air the whole UK. The plan is to more than triple that by 2015, when this area could become the biggest – Water source heat pump windfarm in the world.” technologies “- plan to supply 15% of the countrys energy from – Smart grids alternative and renewable sources by 2020.” http://www.guardian.co.uk/world/2012/mar/19/china-windfarms- • System integration renewable-energy • Telecommunication solutions – Energy efficient urbanization and building24/10/2012 © Finpro 17
  18. 18. Renewable Energy – South East Asia • Indonesia – Biomass related opportunities • Malaysia Palm oil industry in Malaysia – Up to € 400 million soft loans “The palm oil industry has considerable potential to available for RE projects support the nations economy through the provision of renewable energy as well as through traditional export – Solar of agriculture commodities.” – Biomass “The challenge for this industry, is to organise economical logistics to make sure that the biomass – Biogas are collected and brought to a central factory or – Mini-Hydro processing plant, while at the same time, providing opportunities to generate new jobs and create new – Solid Waste business opportunities.” “Malaysia and Indonesia currently account for 87 percent of the world’s palm oil production” • Philippines http://www.btimes.com.my/Current_News/BTIMES/articles/palmo/ – Geothermal Article/ http://www.btimes.com.my/Current_News/BTIMES/articles/8MUM – Hydropower BAI/Article/ – Biomass – Wind, solar and ocean energy24/10/2012 © Finpro 18
  19. 19. Municipal Solid Waste – East Asia • China • South Korea – WWTP sludge and urban water – Vacuum waste collection market body (river and lake) sediment dewatering – Composting facilities – Economical & ecological energy – Energy plants recovery • Further processing of the solids – World’s largest Foster Wheeler with economical and ecological 4x550MW benefits – Smart and intelligent MSW collection and transportation • Carrier capacity, higher processing and storage capacity • Smart waste transportation i.e. pneumatic in specialized areas or industrial sectors. – Optimization or upgrade of MSW- to-energy incineration plants • Burning efficiency with higher energy output • Dioxin online measurement in the furnace stack is a hot issue – Kitchen waste processing and treatment • Onsite kitchen waste disposal in urban areas24/10/2012 © Finpro 19
  20. 20. Municipal Solid Waste – South East Asia • Malaysia – Solid Waste Management – Integrated Municipal Solid Waste Facility – Waste To Energy – Incinerators – Industrial Furnaces Health ministry cleans up wet markets in Jakarta – Turnkey Projects "In close cooperation with the Trade Ministry, the Health Ministry is making efforts to improve sanitation in traditional wet markets under the “Pasar Sehat” (healthy wet market) initiative. Under the program, eight new wet markets have been opened, which cost the Health Ministry Rp 994 million (US$ 105,364).Under the program, each traditional market receives Rp 45 million.Some of the wet markets targeted in the program include one in Samosir, North Sumatra, and another in Sikka, East Nusa Tenggara. “It’s not a lot of money, but enough to fix the plumbing, sewer and waste treatment facilities” The Health Ministry has increased the budget for the program to Rp 1.5 billion for 2013.” http://www.thejakartapost.com/news/2012/07/30/he alth-ministry-cleans-wet-markets-considered- breeding-ground-disease.html24/10/2012 © Finpro 20
  21. 21. Software and Digital Media – East Asia • China – Mobility & TMT market – Wireless devices and China Mobility and TMT Markets Developing cloud based applications Rapidly "TMT, mobility, and technology companies continue – Digitainment & to seek effective methods to enter and expand in the China market. This includes effective alliances & Entertainment partnering and increasingly strategic investments and M&A…” – Intelligent automation “Now with over 800 million mobile subscribers and 400 + million internet users the China TMT, Mobility, – IoT and Digital Media opportunities for foreign and Chinese players are significant and growing. “ – OEM & ODM http://www2.prnewswire.co.uk/cgi/news/release?id= 23644024/10/2012 © Finpro 21
  22. 22. Software and Digital Media – South East Asia • Malaysia • Philippines – Multimedia Super – Software development Corridor – Applications development – Talented developers and and maintenance engineers – IT operations and – Tele-health infrastructure – E-Government – business analysis, project – Smart Schools management, education – Animation & game development • 2D, 3D, Maya, 3D Max, Medical/Educational Graphics & Animation24/10/2012 © Finpro 22
  23. 23. Service Industries – East Asia • China – Education (reform ongoing) • Teacher training • Adult education • Educational solutions International Tourism Expenditure of – Outbound tourism Residents and International Departures – Architecture 85 – Engineering services, industrial design 75 – Consumer design products 65 – BPO 55 • South Korea 45 – The market is opening due to the 35 FTA’s 25 • Marine services and education. – Increased awareness and interest in the Finnish Departures (million) education system from Korean side. The market Expenditure (billion is extremely large in USD) Korea BMI China tourism report Q3/2011 • Care services24/10/2012 © Finpro 23
  24. 24. Service Industries – South East Asia • Malaysia • Philippines – Tourism – Globally number 1 in – Higher Education voice, number 2 in non- – Vocational training voice and complex IT/BPO services – Engineering services – Contact centers – Outsourcing – Back-office operations – Complete Logistics value chain – Knowledge-process outsourcing – Software development, animation & game development – Engineering design24/10/2012 © Finpro 24
  25. 25. Life Sciences – East Asia • China • South Korea – Food safety (tainted food & food diagnostics) – Food (functional) – Food chain, traceability & RFID – Interior materials & Design application – Contract Research & Manufacturing – Cancer early diagnosis and therapy – Modernization of Traditional Chinese Medicine (TCM) Life sciences enter top sectors ranking for – Sports Industry: health concept, foreign investment fitness in fashion – Dental / mouth care in China "With its growing and youngest population in the world, the Asian continent offers great – Rural Healthcare, telemedicine, business opportunities to global pharma, sensor application medical and healthcare companies. To – Biomaterials & implants effectively respond to the growing demand – Medical waste disposal solution for healthcare, Eli Lilly, Lonza Group, – Reforming of medicine distribution Novartis, Merck KGaA, Novo Nordisk, Pfizer, channels & hospital management they all further consolidated their presence in – Textile and garment sourcing in the Chinese market. Shanghai figures as the China most attractive destination in the country, followed by Beijing and Hong Kong, where – Occupational health/health also the presence of top research institutions promotion guarantees good availability of skilled – Digital health care/home care labour.” www.life-science.se/se/7424/10/2012 © Finpro 25
  26. 26. Life Sciences – South East Asia • Indonesia • Philippines – Health care coverage for all – Construction and upgrade of citizens to be implemented by hospital buildings and facilities January 2014 and other social – Purchase and supply of modern security benefits for workers by hospital equipment, furniture and July 2015 at the latest fixtures – Middle class thriving for better – Installation of a comprehensive medical care hospital IT system – Diagnostics, rural healthcare – Medical tourism – world class hospitals • Malaysia – Medical Devices – Biomaterials and implants – High-tech Diagnostic Systems – Early detection methods – Rural Healthcare, telemedicine, sensor application – Medical waste disposal solution24/10/2012 © Finpro 26
  27. 27. Thank You!24/10/2012 © Finpro 27
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