More than 80 per cent of businesses in Asia are looking to expand internationally for revenue and profit growth in the next three years, but face challenges in finding overseas partners, and legal and tax support, according to the UOB Business (SME & Large Enterprises) Outlook Study 2023.

The bank’s findings were from an annual survey of small and medium-sized enterprises (SMEs) and large enterprises in Asia. This year, the scope of the study was expanded beyond Singapore to include companies in Indonesia, Malaysia, Thailand, Vietnam and China for the first time.

Of over 4,000 businesses surveyed, 83 per cent, or four in five, want to expand overseas. The desire is most pronounced in companies in Indonesia, China, Thailand and Vietnam, while those in Singapore, Malaysia and Hong Kong are more hesitant. Top sectors looking to expand are industrials, oil and gas, followed by wholesale trade, and technology and media.

Asean and China are the top two markets businesses want to expand to, with only one in four companies interested in expanding beyond Asia. Within Asean, Singapore ranks at the top of countries for businesses to venture into, while Thailand and Malaysia tie for second place.

But challenges in expanding overseas are holding businesses back, top among which are difficulties in finding the right partners to work with, lack of in-house talent, as well as lack of legal and regulatory compliance and tax support. 

Most businesses cited needing more support to venture overseas, including connecting with overseas partners and clients, and tax incentives.

About four in five companies also value having a cross-border digital trade platform for their overseas expansion.

In addition, around 60 per cent of SMEs surveyed highlighted that their supply chains have been affected by ongoing geopolitical tensions. Some 90 per cent of businesses have been affected by high inflation, with increased cost of supplies and greater challenges in procuring suppliers.

About 30 per cent of companies are now trying to diversify their supply chain by building stronger relationships with their suppliers and tapping data analytics to help in their decision-making.

To ease supply-chain woes, SMEs want more support for tax incentives, employee reskill-and-upskill training programmes, easier access to funding, and connections to the right technology and solution providers.

Aside from supply-chain concerns, the study also found that sustainability practices were not widely implemented among businesses.

Although around 90 per cent of businesses believe in the importance of sustainability, only 45 per cent have implemented sustainability practices. Only 38 per cent of SMEs in Singapore have these practices in place, compared with more than half of SMEs in Thailand and Vietnam.

Businesses have attributed the low implementation rate to concerns about increasing costs for customers, which will in turn hurt their profits and revenue.

However, UOB head of group commercial banking Eric Lian highlighted that regulators, industry leaders and corporates are becoming more rigorous and disciplined in achieving sustainability standards within their supply chains.

“Businesses that are slow to embrace environmental, social and governance may lose out on business opportunities,” he added.

Source: The Business Times. Link Here.

BANDAR SERI BEGAWAN – Brunei has ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), five years after signing the wide-ranging trade deal, which covers a free trade area valued at US$13.5 trillion.

The Ministry of Finance and Economy released a statement Sunday saying the government had deposited its intent to ratify the treaty on May 13.

“The CPTPP will provide trading opportunities to new markets like Canada and Latin American countries such as Chile, Peru and Mexico. Furthermore, the agreement will also enhance Brunei Darussalam’s attractiveness as a destination for foreign direct investments,” the ministry said.

“With its high tariff-rate liberalisation and modern trade rules, the CPTPP ensures trade between members continue to be open, mutually-beneficial and facilitative.”

For Brunei, the agreement will come into force 60 days after the notification was sent to New Zealand, the Depository of CPTPP.

Source: The Scoop

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His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam in a titah expressed satisfaction with Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) cooperation that has continued to progress well, despite challenges faced since the COVID-19 pandemic started.

His Majesty delivered the titah at the 15th BIMP-EAGA Summit, which was held at Komodo Ballroom, Meruorah Convention Centre.

Furthermore, added His Majesty, the re-opening of borders has facilitated the resumption of transport services and movement of goods and people, thus bringing in opportunities such as tourism and cross-border trade to the sub-region. To this end, the development of more joint cooperation projects will further strengthen supply chain and secure BIMP-EAGA’s growth area as a production base for the region. This also highlights the importance of connectivity as a driver of growth and economic activities.

With the new norm of doing business in the post-COVID-19 era, it is crucial to advance digitalisation through ICT-related projects, to align with BIMP-EAGA’s work implemented at the ASEAN level such as the Digital Economy Framework Agreement and the Bandar Seri Begawan Roadmap on Digital Transformation.

In concluding the titah, His Majesty stated that the relocation of Indonesia’s new capital, namely Nusantara, in Kalimantan will create even more opportunities for growth and development in this sub-region. Therefore, BIMP-EAGA is encouraged to take advantage of opportunities by having better coordination and facilitation of BIMP-EAGA’s initiatives.

At the end of the Summit, the leaders endorsed the Joint Statement of the 15th BIMP-EAGA Summit.

Source: Borneo Bulletin

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Thailand remains on track to improve economic ties with Saudi Arabia as it seeks a new potential market for its products, following sluggish exports to the US and Europe.

The value of business deals between Thailand and Saudi Arabia is expected to reach 10 billion baht this year, said Nava Chantanasurakon, a member of the executive board of the Federation of Thai Industries(FTI).

"Saudi Arabia is a high-potential market and a gateway to the Middle East," he said, referring to the Gulf Cooperation Council, which comprises Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman.

Riyadh wants Thai businesses to invest there, especially after Thailand and Saudi Arabia agreed to boost business relations.

Last year, a joint business council between the two countries was set up to promote trade under a memorandum of understanding signed by the Joint Standing Committee on Commerce, Industry and Banking and the Federation of Saudi Chambers of Commerce.

The FTI is optimistic about trade benefits, work and investments in Saudi Arabia, which is pursuing "Vision 2030", with the flagship of that scheme the establishment of the US$500-billion mega-city of Neom

The government wants to make Neom, located on the Red Sea coast in the northwestern province of Tabuk, a smart city that is less dependent on oil and promotes diverse businesses.

According to the FTI, Saudi Arabia is interested in farm produce, food, cars and auto parts from Thailand.

Thai food processing, especially in the halal food category, has grown rapidly thanks to the country's expertise in food manufacturing and good logistics facilities.

"Thai investors should take advantage of these benefits and plan their new investments in Saudi Arabia," said Mr Nava.

Saudi Arabia, with a population of around 36 million, saw its GDP grow by 8.7% last year, the highest level in the G20.

He said Saudi investors are interested in the Eastern Economic Corridor (EEC) and are expected to spend around 300 billion baht developing various businesses, including those in the energy sector.

Last year around 100 prospective Saudi investors, led by Krayem Alenezi, member of the board of directors of the Riyadh Chamber of Commerce,visited the EEC to get first-hand information about the zone, which covers parts of Chon Buri, Rayong and Chachoengsao.

Source : Bangkok Post

In April 2023, Thailand’s state-owned oil and gas conglomerate, PTT Group, announced that it would invest $7 billion in producing green hydrogen with ACWA Power, Saudi Arabia’s leading renewable energy company.

The project aims to build a plant in Thailand that can produce 225,000 tons of green hydrogen annually, equivalent to about 1.2 million tons of ammonia.

Green hydrogen is a form of renewable energy that is produced by using electricity from solar, wind, or other sources to split water molecules into hydrogen and oxygen. Unlike fossil fuels, green hydrogen does not emit any greenhouse gases when used, making it a clean and sustainable alternative for various applications.

One of the most promising uses of green hydrogen is to power electric vehicles (EVs), especially heavy-duty vehicles such as buses, trucks, and trains that require more energy than batteries can provide. Green hydrogen can also be converted into ammonia, which can be used as a fertilizer, a chemical feedstock, or a fuel for ships and power plants.

Thai government’s targets of carbon neutrality by 2050

The investment is part of PTT’s net-zero strategy, which aligns with the Thai government’s targets of carbon neutrality by 2050 and net-zero emissions of greenhouse gases by 2065. PTT’s CEO Auttapol Rerkpiboon said that the project is the first step to push Thailand to be an international exporter of green power. He added that the goal is to supply green hydrogen and ammonia to power EVs in ASEAN countries and beyond.

The project is also significant for the diplomatic relations between Thailand and Saudi Arabia, which were restored in January 2022 after more than three decades of estrangement due to the Blue Diamond Affair. The affair involved the theft of $20 million worth of jewels from a Saudi prince’s palace in 1989 by a Thai worker, followed by a series of murders and cover-ups that soured the ties between the two countries.

The green hydrogen deal is seen as a sign of mutual trust and cooperation between Thailand and Saudi Arabia, as well as a shared vision for a clean and prosperous future. ACWA Power’s CEO Paddy Padmanathan said that the partnership with PTT will create new opportunities for both countries in the emerging green hydrogen market. He also said that ACWA Power is committed to supporting Saudi Arabia’s Vision 2030, which aims to diversify the economy and reduce its dependence on oil.

Global demand for green hydrogen could reach 800 million tons by 2050

Green hydrogen is expected to play a key role in the global energy transition and decarbonization efforts. According to BloombergNEF, the global demand for green hydrogen could reach 800 million tons by 2050, up from less than 1 million tons today. The International Energy Agency (IEA) also estimates that green hydrogen could account for 19% of total final energy consumption by 2050, if supported by strong policies and investments.

Thailand and Saudi Arabia are among the countries that are taking proactive steps to tap into this potential and become leaders in the green hydrogen industry. By investing in green hydrogen production and consumption, they are not only reducing their environmental impact but also creating new economic opportunities and strengthening their bilateral ties.

Source : Thailand Business News

Sabre Corporation a leading software and technology provider that powers the global travel industry, today announced a renewed distribution agreement with Thai Airways. The flag carrier will also be using Sabre’s robust data combined with its consultancy services to help it accelerate recovery.

The Global Distribution System (GDS) renewal ensures that Sabre-connected travel agencies will continue to have access to Thai Airway’s content globally, while enabling the airline to retain its reach across Sabre’s valuable network of global travel buyers and intermediaries. Meanwhile, Thai Airways will also be taking advantage of Sabre’s extensive global booking data to help it identify recovery and growth opportunities.

“As we continue to ramp up operations and resume international flights, it is essential to us that we are able to continue to distribute our fares, offers and itinerary to travel agents, and their customers, across the world,” said Mr. Korakot Chatasinga, Chief Commercial Officer, Thai Airways. “We’re thrilled to have renewed our distribution deal with Sabre at the same time as being able to harness the power of Sabre’s robust booking data and industry expertise.”

Primarily operating from Suvarnabhumi Airport as well as its secondary hub in Phuket, Thai Airways typically serves around 40 international destinations, and is a founding member of the Star Alliance, the world’s largest global airline alliance.  It has so far resumed a significant proportion of its pre-pandemic international flights, and is forging ahead with further recovery and growth plans. With Thailand surpassing its tourist number targets last year, and expecting further recovery, particularly from the Chinese travel market, Thai Airways is poised to play an important role in future industry growth.

“We’re delighted that Sabre will continue to be a key part of Thai Airways’ journey as the carrier, and the country, continue to experience strong travel demand,” said Rakesh Narayanan, Vice President, Regional General Manager, Asia Pacific, Travel Solutions Airline Sales. “Our booking data includes detailed insights on itinerary, origin, connection, passenger type, length of stay and other booking patterns. However, it’s important not just to have access to such data, but to be able to interpret and make the best use of it to support an airline’s business strategy and growth. Sabre will be providing consulting services to help identify areas of potential opportunity for Thai Airways to increase efficiencies and enhance future revenue.”

Source : DESTINATION THAILAND NEWS