Ongoing supply chain disruptions in the ASEAN region, caused by various factors including China's COVID-19 strategy and global geopolitical tensions, are costing the region a staggering $17.01b annually, as per the analysis by business transformation consultancy TMX Global.

TMX Global Asia Managing Director Dean Jones highlighted that these disruptions are affecting an average of 0.47% of business revenue worldwide.

The research revealed that Singapore, Malaysia, and Thailand were adversely affected by negative supply and demand shocks compared to smaller economies like Brunei and Myanmar.

Despite this, ASEAN’s gross domestic product is forecasted to more than quadruple over the next two decades, increasing to $13.3t by 2040 driven by both exports and domestic demand.

According to Jones, the reopening of China in December has provided significant relief to global brands that are still manufacturing out of Asia. It is perceived as a positive sign of further easing from the immense pressure faced by global supply chains. 

The supply chain disruptions, particularly in 2022, have resulted in increased consideration of ASEAN's role in anticipating future volatilities in the global supply chain landscape. As a result, businesses are increasingly adopting a 'China Plus One' strategy by diversifying their operations, such as production centres and warehouses outside of China. 

Malaysia, India, Thailand, and Vietnam are now the top choices for businesses to set up their operations as they witness opportunities to become global manufacturing and shipping centres.

“Whilst all these put the region at an advantage, it also means that businesses in the region should all the more not let their guard down when it comes to ensuring supply chain resilience,” Jones warned.

“ASEAN cannot afford to rest on the laurels of its geographic, regulatory, economic, and demographic advantages if it wants to continue the fast track to lead on global trade. Supply chains thrive on predictability, and so the ability to take away as much of the uncertainty as possible through a resilient supply chain is crucial,” he said.

Source: Asian Business Review. Link Here. 

Thailand's retail industry is expected to grow by 6-8% this year, double the rate of the GDP, helped by the recovery of tourism, according to the Thai Retailers Association (TRA).

Yol Phokasub, president of the TRA, said the retail industry has been improving, particularly in destinations reliant on tourism such as Phuket, Samui and Pattaya.

"Tourism makes up a vital portion of the Thai economy, in addition to exports," said Mr Yol.

"Although consumer sentiment early this year remains fragile, it is better than expected."

Thailand's retail industry grew by 2-3 times the GDP rate over the past several years, but stumbled during the Covid-19 outbreaks as many countries closed their borders.

He said to stimulate retail market expansion and overall economic growth, the association is calling on the government to enact more measures and incentives for the retail and service sectors.

The government is also being urged to promote Phuket as a tax-free province to draw foreign tourists to spend more there.

Tareetip Wongsaengpaiboon, senior vice-president of Kasikorn Securities Plc, said most retailers are expected to resume their investment, upgrade stores and expand their business abroad this year after foreign tourists returned to Thailand faster than expected, while inflationary pressure is easing.

"Electricity bills are likely the only concern for consumers, but we hope that situation will not worsen," Ms Tareetip said.

Siam Makro Plc, the operator of Makro cash-and-carry stores and Lotus's hypermarkets, allocated a combined 22.7-24.9 billion baht this year to expand its retail and wholesale business.

Half of the budget is to expand Makro and Lotus's outlets. Between 10-11 billion baht is allotted for store expansion, with 4 billion for digital, 3-4 billion for new businesses, 2.2 billion for store refreshment, 1.8 billion for IT and the remainder for capital maintenance and energy-saving schemes.

Meanwhile, Central Retail Corporation (CRC), the country's biggest retailer, plans to invest 28 billion baht to expand its business in Thailand and Vietnam this year.

The budget covers all core business groups, comprising food, fashion, consumer durables, property, and health and wellness.

Of the total investment, 70-75% is to expand CRC's business in Thailand, with the rest allocated to operations in Vietnam, which will focus largely on the food and property business.

The majority of the budget is to open new stores or renovate and remodel existing stores, while 20% of the outlay is for information technology.

The investment is part of CRC's five-year business plan, spanning 2023-27 and totalling 150 billion baht, excluding budgets for mergers and acquisitions, to increase the firm's revenue and market capitalisation by 2.5 times and increase its earnings before interest, taxes, depreciation and amortisation by 3.5 times by 2027.

Source : Bangkok Post

Huawei Technologies (Thailand) Co., Ltd. has announced continuation and expansion of its “Digital Bus” project in 2023. The project aims to foster a strong foundation for Thailand’s future digital personnel ecosystem.

Huawei kicked off the year by using the Digital Bus to equip ICT personnel in Prachuap Khiri Khan Province. The initiative aims to lay a strong foundation for empowers Thai talent by helping people apply digital technologies into their daily lives. Going forward, Huawei plans to combine its Digital Bus project with the company’s other flagship digital talent training and competition programs to further enhance Thailand’s digital capabilities.

 In 2022, Huawei’s Digital Bus project successfully provided basic digital skills and hands-on training to more than 3,000 individuals across eight provinces. Those attending included students, vulnerable groups, workforces, SMEs, and local farmers in Singburi, Songkhla, Phra Nakhon Si Ayutthaya, Chachoengsao, Chiang Mai, Phichit, Chon Buri and Nakhon Ratchasima. Huawei also accelerated ICT personnel development among SMEs and startups in Phayao province and developed digital skills for workers in Phetchabun. The Digital Bus itself is powered by Huawei’s proprietary Fusion Solar Residential Smart PV technology, thereby helping to promote use of clean energy generated from solar power technology.

Moreover, Huawei will adjust its training courses and add more learning materials in intensive courses that can be accessed through Huawei Matepad tablets, empowering students to self-learn. The courses will cover topics such as how to utilise technology to improve daily life, cyber security and clean energy. Plus special content for vulnerable groups, including Braille Solution. With Huawei’s ‘Grow in Thailand, Contribute to Thailand’ mission, it is committed to bringing technology to every person, home and organisation to help drive Thailand into the next fully connected intelligent era.

Source : Bangkok Post

With the restoration of outbound group travel to 20 nations, including Thailand, starting on February 6, 2023, Thailand is welcoming the arrival of Chinese group tours.

High-ranking TAT executives, Chinese officials, and members of the Thai public and business sectors all attended a welcoming ceremony on February 6th. The first group of tour travelers touched down on a Spring Airlines aircraft from Guangzhou with plans for a 6-day tour that will include some of the most well-known sights of Bangkok and Pattaya. They are expected to visit places like Bangkok’s Wat Phra Kaew (the Temple of the Emerald Buddha), Pattaya’s Nong Nooch Tropical Garden, Yaowarat (Chinatown), and Wat Paknam Phasi Charoen, which is famous for its giant seated Buddha figure.

14 flights from China will arrive in Thailand each day delivering group tours. These flights, operate by different airlines, are set to leave from Guangzhou as well as Xiamen, Beijing, Shanghai, Nanjing, Chengdu and Nanning before landing in Bangkok and Phuket.

Aeronautical Radio of Thailand estimates that there will be 36,896 flights between China and Thailand in 2023, a 227.6% increase over the previous year and more than twice as many as there were in 2022. In the second half of the year, the number of flights is anticipated to progressively rise, reaching the pre-COVID record level in 2024.

Thailand saw a significant increase in foreign visitors, with a total of 11.15 million people traveling to the kingdom. This was a significant jump from the previous year, when just 428,000 visitors were recorded due to pandemic-related travel restrictions. Thailand is aiming to attract 25 million international visitors this year, with a focus on attracting at least five million visitors from China.

The reopening of China is expected to further boost Thailand’s vital tourism sector, which before the pandemic accounted for about 12% of the gross domestic product in Southeast Asia’s second-largest economy.

Source : Thailand Business News

MONIX Co., Ltd., a Bangkok-based leading AI-powered digital lending platform, announced today that the company has secured US$20 million in the first close of its pre-IPO fundraising.

The investment was led by the mothership SCBX and a new investor Lombard Asia, a Southeast Asia's growth-focused private equity manager, demonstrating the company's strong growth in micro-finance lending on the path to IPO in the near future and becoming the market leader in Thailand's digital lending arena.

Mr. Qinbin Fan, Chief Executive Officer, and Ms. Thiranun Arunwattanakul, Chief Operating Officer of MONIX, said “We are extremely delighted to welcome our new partner to jointly create better opportunities for underserved people. The new equity we have secured shows the confidence that SCBX and Lombard Asia have in our vision and market-leading position. We are dedicated to continuously delivering inclusive financial products and services across our platform by advancing the power of unrivaled and cutting-edge artificial intelligence and machine learning technology.”

Since its establishment in 2020 as a joint venture fintech startup between SCBX Group and China’s fintech unicorn Abakus Group, MONIX has been at the forefront of digital unsecured lending solutions for underbanked people in Thailand who are oftentimes overlooked by conventional banks or financial institutions. With the unwavering vision of creating opportunities for people to prosper and enjoy life, the company offers the humanized, AI-driven FINNIX application to over 36 million Thai people in order to improve the country's informal debt problems. This application provides instant money in 5 minutes using only alternative data and does not require any paper documents or guarantors.

As of 2022, MONIX recorded US$458 million in loan disbursements to over 650,000 users, reflecting positive net profits despite the challenging economic situation. With the new funds raised, which bring the company’s aggregated funding to US$40 million, and continued support from both partners, MONIX is well-positioned to accelerate its growth and expansion of digital lending and financial product offerings, bolster customer growth and engagement, and innovate its services to enhance financial inclusion for Thai citizens, as well as prepare for an IPO.

Dr. Arak Sutivong, Deputy CEO of SCBX, said “This follow-on investment in MONIX marks our continued commitment and strong belief in the long-term prospects of the company. As the mothership of the group, SCBX continues to support our portfolio companies in their own way including MONIX’s external fundraising this round to fuel its growth and prepare for IPO in coming years, uplifting value of the company and maximizing returns to shareholders. Together with experienced talents from Lombard Asia and Abakus Group, we ensure MONIX will achieve its established plan. This also strengthens one of our powerful goals of SCBX to pursue new possibilities in financial services and maximize value of portfolio companies. Going forward, we continue to advance our strategy in unleashing hidden value from our investments across fintech space and look forward to many more achievement to come.”

Mr. Ekaluck Wangchucherdkul, Managing Director of Lombard Asia, said “MONIX is a market leader in an exciting and fast-growing business. The partnership is in line with our investment strategy of generating investment returns and creating a positive impact, in this case, by providing access to high quality financial services to the underserved. As an active investor, Lombard Asia will partner with MONIX’s management team to accelerate the execution of growth strategy and work toward a successful IPO.”

Source THE NATION THAILAND

The Thai National Shippers’ Council (TNSC) has announced that the country’s exports are projected to grow between 1% and 2% this year, unchanged from previous forecasts, due to a slowing demand globally.

TNSC Chairperson Chaichan Chareonsuk pointed out that shipments, a significant contributor to economic growth, are also faced with high currency volatility.

Despite some negative factors, the council sees positive indications of China’s economic recovery. The group said exports are expected to decline by 3.7% in Q1 of 2023 compared to the same period last year, though they are predicted to recover in the second quarter with a 0.7% dip and post gains in the latter half of the year.

According to Chaichan, exporters are hoping for the baht to hover around 34-35 per dollar in order to improve trade competitiveness and align with other regional currencies. Although the baht experienced a sharp drop on Monday (6 Feb), it has still increased by 3% against the dollar in 2023 and is currently trading at around 33.6 to the greenback.

The shippers’ council is also calling on the central bank to maintain stability in the baht and to keep interest rates at appropriate levels. In 2022, customs-based exports saw a 5.5% increase.

Source : Thailand Business News

One of Thailand’s largest durian exporters has signed an agreement with a Chinese consortium wanting to buy 5,000 containers of fresh and frozen durian. The value of the fresh durian portion alone will likely reach 10 billion baht.

Deputy Agriculture and Cooperatives Minister Prapat Pothasuthon witnessed the signing of a cooperation agreement between Queen Frozen Fruit Co, Ltd and a consortium of Chinese state enterprises. The agreement pertains to the exportation of durian to China by Queen Frozen Fruit.

The deputy minister said the agreement affirms orders for Thai durians that will be exported to China, assuring farmers that the fruits will not be in excess supply and sales will remain lucrative.

The Chinese consortium is buying 3,000 containers of fresh durian, worth 10 billion baht, along with 2,000 containers of frozen durian. The consortium of Chinese state enterprises has also expressed interest in buying betel nuts, seafood, rose apples and coconuts.

The Thai Ministry of Agriculture and Cooperatives will rapidly coordinate with the relevant entities so the goods wanted by the consortium would be exported.

Waranyaphak Simahatthanawekhin, Chairperson of Queen Frozen Fruit Co, Ltd, said Chinese consumers have an appetite for Thai durians, with no less than 600 containers of the fruit being imported into China daily. Durian strains popular with Chinese consumers include Mon Thong, Kan Yao and, more recently, Nam Dam.

The chairperson stressed Thailand has an opportunity to export more varied types of durian if orchard farmers expand their Nam Dam durian cultivation area. She added that her company has already received about 200,000 tonnes of durian orders from China for 2023.

Source : NATIONAL NEWS BUREAU OF THAILAND

The government has set aside a budget of 24 billion baht to subsidize domestic manufacturing of battery cells for electric vehicles (EVs).

Energy Minister Supattanapong Punmeechaow said the subsidy is one of the measures agreed upon by the National Electric Vehicle Policy Committee at its first meeting of the year. The state subsidy is expected to help manufacturers cut production costs, which in turn would make EVs more affordable in the domestic market.

Additionally, the committee will implement other measures such as a reduction in excise tax for EV battery-makers, from 8% to 1%. These incentives are expected to boost domestic production of EV battery cells, with the goal of developing a complete manufacturing base for EVs in Thailand.

However, the energy minister warned that these subsidies will be distributed on a “first-come, first-served” basis due to the limited budget.

The ministry added that owing to a number of positive factors, Thailand has drawn the attention of many leading battery manufacturers to set up their factories in the country.

Those factors include a clear government policy on EVs, surging domestic demand for EVs and massive investment by Chinese and European EV-makers.

Source : NATIONAL NEWS BUREAU OF THAILAND

The Ministry of Commerce has voiced optimism over Thailand’s trade relationship with Laos after officials from both countries met to discuss the reopening of four border checkpoints.

Permanent Secretary for Commerce, Keerati Rushchano, recently visited Laos to meet with the Vice-Mayor of Vientiane and the Director of the Capital City’s Planning and Investment Department, Phoukhong Bannavong. The meeting was aimed to accelerate the reopening of four border checkpoints that have been closed due to the Covid-19 pandemic, in order to stimulate the border economy and promote tourism.

According to Keerati, these checkpoints include Tha Duea local checkpoint opposite Nong Khai Municipal Pier, Nong Da traditional checkpoint, Park Ngum traditional checkpoint, and Kokhea traditional checkpoint. Thailand is ready to reopen each location as soon as Vientiane agrees to do the same.

Responding to his Thai counterpart, Phoukhong Bannavong said that Vientiane is now working to solve infrastructure, operational system, and human resource issues, and pledged to reopen the checkpoints as soon as possible.

The two sides have also agreed to focus on tourism connectivity to generate maximum benefits.

Thailand has 49 border checkpoints with Laos, with 44 currently open on the Thai side and 36 open on the Lao side. In 2022, Thai-Lao border trade was worth 260 billion baht, a 21.1% increase from the previous year, and accounted for 94.7% of the total trade between the two countries.

Border trade in Nong Khai province, which is adjacent to Vientiane, amounted to 86.5 billion baht in 2022, a 15.3% increase from the previous year, ranking first in border trade between Thailand and Laos.

source : NATIONAL NEWS BUREAU OF THAILAND

SWIRE Properties has acquired a 40 per cent stake in a prime freehold plot in Bangkok for 2.4 billion baht (S$95 million), its first investment in the Thai capital’s property market.

The Hong Kong company bought the interest in the Wireless Road site from HKR International. It plans to develop the site into a luxury condominium project in a joint venture with Thai developer City Realty. The 136,336 square feet site is located in the Lumphini sub-district in Pathum Wan District. It is situated next to the Lumphini park and is close to upscale shopping malls, international schools, five-star hotels and embassies.

“Bangkok is currently one of the most exciting emerging markets in South-east Asia and we see significant potential for quality, high-end residential properties in the city,” said Tim Blackburn, chief executive officer of Swire Properties, in a statement on Thursday (Feb 2).

In 2022, Swire announced plans to invest HK$100 billion (S$16.6 billion) in its core markets, including South-east Asia, Hong Kong and China, to drive future growth over the 10 years. About 20 per cent of the funds will be allocated to residential trading opportunities in these markets, Swire said.  The company has several residential projects currently under development in South-east Asia, including in Ho Chi Minh City in Vietnam and Jakarta in Indonesia.

In Singapore, the company completed the development of Eden, an ultra-luxury residential project in Draycott Park, in 2019. In March 2021, Swire announced that it had sold all 20 units, each 3,035 sq ft in size, for S$293 million. According to caveats data, there were two transactions for two units – one at S$13.07 million (S$4,305 per square foot) and one on a much higher floor for S$18.29 million (S$6,024 psf), and 18 units sold in a bulk transaction for S$261.64 million or S$4,789 psf. All 20 units were said at the time to be sold to a single Chinese family.

“South-east Asia is an important part of our residential trading strategy, and we will continue to explore opportunities which enable us to bring our premium residential brand to new markets in the region,” said Blackburn.

source : THE BUSINESS TIME

More Singapore companies are seeking help to enter and grow their business in the Indonesian market, as the gradual recovery from the Covid-19 pandemic in both these nations gives impetus to expansion plans.

In 2022, 297 local firms engaged the Singapore Business Federation (SBF) to take their goods and services to the region's largest economy -- up from 185 in 2021 and 78 in 2020. They were from sectors that included healthcare, education, telecommunications, and food and beverage.

The firms consulted the SBF under its GlobalConnect@SBF scheme, which was set up in partnership with Enterprise Singapore to support companies planning to grow globally.

Under the scheme, which was launched in November 2019, SBF has a centre in Indonesia that firms can turn to for advice and use to meet business partners. The Singapore Enterprise Centre in central Jakarta is staffed by SBF's local market advisers.

Speaking to members of the local media last Thursday, Mr Hisyaamuddin Abu Bakar, country head for Indonesia at SBF, noted that businesses are drawn by the large Indonesian market. Indonesia's population stands at almost 280 million, making it the world's fourth-most populous country.

SBF handles various inquiries from Singapore in areas such as incorporation, compliance and regulations in Indonesia, said Mr Hisyaamuddin.

"So we will facilitate them on a case-to-case basis in what they need. But mainly, most of them are interested in finding business partners, and they are worried about how to enter the Indonesian market."

He added that the interest in Indonesia from Singapore firms has been high, even during the pandemic.

Singapore's bilateral trade with Indonesia was $59.1 billion in 2021, a 21 per cent increase from the year before. The total value of Singapore's investments in Indonesia amounted to US$9.4 billion (S$12.5 billion) in 2021. Since 2014, Singapore has also occupied the top spot on the list of Indonesia's investors.

Over the past three years, SBF has conducted more than 900 sessions where it advised businesses on how to grow in the Indonesian market, and helped facilitate 36 projects by Singapore firms in Indonesia.

One firm that enlisted SBF's expertise was International Cancer Specialists, a medical company that provides cancer screening and treatment.

When the company wanted to enter the Indonesian market in 2021, its management was unsure whether it could get credible professionals to help it meet legal and tax requirements.

Mr Benjamin Tan, the company's chief executive and executive director, said that with SBF's help, it managed to hire a good lawyer and tax agent within a few weeks.

"We managed to get everything up and running... within three months," he said.

IndoPanda, which provides Chinese language lessons as well as services to send students to China for further studies, tapped SBF to find new business opportunities in Indonesia.

CEO Hendri Zhang said that at the end of 2021, SBF helped his business connect with potential clients and partners, including DBS Indonesia.

"The local staff there expressed interest in learning Mandarin, so they connected us with the human resources personnel in the company. And very quickly, we were able to give them a proposal about the courses that we offer," he said.

Source: The Straits Times. Link Here.