DEEPENING Australia’s economic engagement with South-east Asia is one of the Australian government’s top priorities.

Australian Prime Minister Anthony Albanese has appointed me to lead a South-east Asia Economic Strategy to 2040, and I am consulting political and industry leaders to hear their perspectives. This week, I am visiting Indonesia and Singapore, two of the region’s economic powerhouses.

Australia wants to see more economic engagement with our region. That’s why our strategy will identify current and emerging opportunities to bolster two-way trade and investment between Australia and the 10 Asean member states and Timor-Leste.

We appreciate that Australian products, services and expertise are valued in South-east Asia. But what I’m hearing from partners is both sides can do more, especially in developing skills and investment.

We share a solid foundation on which to further mutual growth. South-east Asia is already one of the world’s most dynamic economic regions and its growth is increasing and developing its needs providing great opportunities for local and global partners.

Australia’s two-way trade with the countries of Asean passed A$127 billion (S$117.3 billion) in 2021, or nearly 14 per cent of Australia’s overall trade. This is greater than our two-way trade with Japan or the US.

Australia shares an established portfolio of 16 bilateral and regional free trade agreements with South-east Asia, such as the Asean-Australia-New Zealand Free Trade Agreement and the Regional Comprehensive Economic Partnership Agreement. Our current trade situation is good, and there are many existing and emerging needs we can respond to.

As our South-east Asian partners look for economic options to boost growth, Australia has much to offer. Australia and indeed our whole region has benefited enormously from the growth of global trade and investment. Our future growth will depend in large part on how we address barriers to trade and investment and indeed do all we can to facilitate great flows throughout the region.

Through trade diversification, including of supply chains, we can promote economic resilience and improve food and energy security. Australia is a trusted and reliable supplier of high-quality grain, meat, fruit and vegetables to the region.

We also invest in sustainable, resilient and productive agriculture and food systems. In 2021-2022, Australian agricultural, fisheries and forestry trade with South-east Asia totalled A$20 billion. The region is also a significant consumer of Australia’s energy, minerals and education.

As a developed economy, Australia has an extensive service sector which is able to share its expertise with the region.

Australia’s world-class universities are consistently ranked among the world’s best and are a vast resource of research and innovation. They are a good example of how our services sector can contribute to capability building across the region.

Many other contributions are being made across the services sector including health, mining services, finance and accounting; these have good prospects for future growth.

Australia is committed to working with South-east Asia to build a resilient, clean energy sector. For example, the landmark Singapore-Australia Green Economy Agreement (GEA) supports mutual economic and climate change objectives, and will help build global clean energy capacity.

We need to demonstrate our potential as a renewable energy superpower, and supporting net-zero transitions is in Australia’s and the region’s interest.

Shared challenges, such as climate change, need a shared solution. Australia is ambitious for what we can achieve together. We are supporting enhanced climate action in South-east Asia, including through increased climate finance partnerships, such as our A$200 million commitment towards a climate and infrastructure partnership with Indonesia.

Emerging regional trends, for example growing middle classes, demographic shifts, digitalisation and increasing importance of sustainability, will transform South-east Asian economies over the next two decades.

The consumer class in South-east Asia is increasing with greater purchasing power. In Indonesia, the Philippines, Malaysia and Vietnam, immense growth is set for the next few decades. By 2040, across most South-east Asian economies, there could be almost 26 million households with disposable incomes of over US$35,000.

One in two Australians are either born overseas or have parents who were born overseas, and many are from our region. In addition to their deep contributions to Australian society, these Australians and the many students and temporary workers from the region provide a wealth of talent to drive the further economic links. This is particularly so in the vital services sector.

The Australian government’s Blueprint for Trade and Investment with Indonesia is an example of the strong interest from Australian companies considering market opportunities in the region. With Indonesia predicted to be fourth-largest economy in the world by 2045, it’s easy to see why.

Singapore is Australia’s largest trade and investment partner in Asean and our business ties are strong.

We remain ambitious in how we will deepen our economic opportunities, particularly as we give effect to the GEA and work together on a bilateral Food Pact. If we can build similarly strong economic relationships with other countries through fulfilling partnerships and opportunities, this will bring long-term benefits to us and the region.

Throughout the Covid-19 pandemic and recent world events, Australia’s international trade has remained strong in most sectors. This resilience, coupled with partnerships and economic trends in our region present an excellent opportunity to deepen economic engagement with South-east Asia.

The writer is Australia’s Special Envoy for South-east Asia, and a former CEO of Macquarie Group.

Source: The Business Times. Link Here. 

The Indonesian government is looking to attract Chinese entrepreneurs from Shandong province to invest in Indonesia's tourism, infrastructure, and fishery sectors. The Indonesian ambassador to China has encouraged Indonesian officials to take advantage of Shandong's strategic location and strong economy to boost economic ties between the two countries. The Indonesian government hopes to tap into the vast potential of the Chinese market and strengthen its economic partnership with China.

S Hotels and Resorts PCL (SET: SHR), the global hospitality company from Singha Estate PCL (SET: S), generated revenue from sales and services of THB 8,963 million in 2022, which marks a 93% year-on-year growth. This remarkable performance was higher than expected, driven by the global recovery of travel, tourism and hospitality.

In Q4 2022, revenue reached THB 2,570 million with net profit of THB 108 million. This represented the second consecutive quarter of profit, which emphasises the strength of the business. The positive momentum is set to continue this year with increased revenue and net profit expected in 2023.

The company’s strong 2022 revenue – which was almost double the figure from the previous year – was boosted by rising earnings in the company’s four hospitality investment portfolios. Particularly strong performance was seen in the Maldives and United Kingdom, which enjoyed a full-year rebound in 2022.

At CROSSROADS Maldives, the integrated lifestyle development which attracts all tourist segments, achieved average occupancy of 66% and recorded a 28% increase in average daily rate (ADR), compared to 2021 – driven by room renovations to better travel demand. The UK portfolio saw 10% higher occupancy and an 8% increase in ADR, to reach its highest-ever performance. As a result, revenue per available room (RevPAR) rose to GBP 48 per night, surpassing the pre-Covid period.

Performance in the Outrigger portfolio also beat expectations, driven by high pent-up demand. Occupancy surged 64% and ADR increased 48% compared to 2021, resulting in an overall performance for 2022 that was stronger than the pre-pandemic.

Hotels in Thailand experienced a strong upturn in performance in the latter months of 2022, as international travel restrictions were removed. This resulted in a 57% occupancy rate, while a combination of business restructuring and a positive response to the SAii brand helped to drive a 67% jump in ADR.

Revenue growth was seen in four successive quarters last year due to the progressive tourism recovery. Thus, Q4 2022 recorded a new high for revenue, backed by the peak seasons in Thailand and the Maldives. The popularity of SAii Resorts in Thailand helped to increase ADR by 17%, which enabled ADR and RevPAR for Thai properties to exceed pre-pandemic levels. This positive momentum has continued in January 2023, as occupancy reached 90% at both Thai and Maldives portfolio hotels. The company expects a solid performance in Q1 2023, including a 30% increase in these two portfolios compared to Q4 2022. The Thai hotels and CROSSROADS Maldives will play an important role in driving the company’s financial performance in 2023.

Mr. Dirk De Cuyper, Chief Executive Officer of S Hotels & Resorts, said: “Our 2022 performance achieved our target and almost doubled our revenue. This was the result of the strength of our business platform, our astute strategy, and our risk-diversifying management. We also focused on improving our services to respond to travellers’ needs and enhancing our direct booking platform. S Hotels & Resorts proved its strength and resilience last year. The company’s growth was above the industry’s average and this will set solid foundations to support our future expansion.”

S Hotels & Resorts expects that the recovery of global travel will accelerate this year, particularly as China’s borders have now reopened. Chinese travellers account for about 10% and 20% of the group’s business in Thailand and the Maldives respectively. The company also unveil new projects this year, which will drive performance for years to come. The third property at CROSSROADS Maldives, SO/ Maldives is set to open in Q4 2023 and will become a new jewel in the Maldives’ tourism crown, setting the standard for the luxury lifestyle hospitality in the archipelago and strengthening the luxury market for the CROSSROADS project.

S Hotels & Resorts’ 2023 business strategy includes asset management, which is expected to boost revenue by 20%, while higher profitability will be driven by rising ADR, efficiency enhancements and cost deductions. From Q4 2022 onwards, we saw a positive impact from the plunge of utility costs in the UK and we assume this will continue in 2023. Our main focus is on building a strong financial position which will allow the group to expand its investment portfolio via acquisitions and asset management to create long-term growth for shareholders.

“We are confident that S Hotels & Resorts will deliver another impressive year with our 2023 strategic direction. The revenue is expected to surge beyond THB 10 billion, driven by our efficient RevPAR management, new investments and strong branding with SAii. In addition, working alongside our business partners is key factor that will push forwards S Hotels & Resorts to maintain its position as a leading player in the hotel industry. We also focus on sustainable growth and will continue to build our business on the principles of balance, sustainability and integration to create accountability and value for customers, shareholders and stakeholders under the basis of risk management and corporate governance,” Mr De Cuyper concluded.

 

Source : DESTINATION THAILAND NEWS

SHARES of True Corporation, created through a merger between Thailand’s number two and three mobile phone operators, will start trading in Bangkok on Friday (Mar 3), marking the culmination of a consolidation process that drew protests from consumer groups and its main rival.

With Thai authorities approving the merger of True and Total Access this week, the new company with 55 million mobile subscribers ended the long reign of Advanced Info Service as the largest telecom company in South-east Asia’s second-biggest economy. Advanced Info, backed by Singapore Telecommunications, ended last year with a total of 46 million mobile users.

True shares have an implied fair value of 10.32 baht each, Kasikorn Securities said in a report on Thursday. The combined market value of the two entities before trading was suspended to complete the merger was 294 billion baht (S$11.4 billion).

The merged entity’s enterprise value was about US$20.7 billion, according to Jorgen Arentz Rostrup, True’s vice chairman and a nominee of Telenor, which owns about 30 per cent in the company. Thai conglomerate CP Group will also hold about 30 per cent in the new company and China Mobile about 10 per cent, with the rest being held by minority shareholders.

The new telecom-tech company will combine the best of True and Total Access and the global expertise of its shareholders, True Corporation said in a statement, adding it will also benefit from synergies within its network, digital infrastructure, IT systems, purchasing, sales and marketing, retail channels and operational costs.

“Thai consumers will benefit from this amalgamation. The synergy will lead to fair and balanced competition, which is ultimately in customers’ interest,” True’s chief executive officer Manat Manavutiveth said in the statement.

 

Source : THE BUSINESS TIME

National oil and gas conglomerate PTT Plc is angling towards becoming a new electric vehicle (EV) manufacturer in Thailand as construction of its assembly plant in Chon Buri is scheduled to finish next year.

EVs are among the new S-curve businesses being promoted by PTT and its subsidiaries to create new revenue sources, said Buranin Rattanasombat, senior executive vice-president.

These businesses have the potential to grow rapidly, he said.

The EV factory, which is located in Rojana Nong Yai industrial complex in Chon Buri, is designed to have production capacity of 50,000 electric cars a year.

The number will rise to 150,000 units annually by 2030, according to PTT.

PTT expects its earnings before interest, tax, depreciation and amortisation (Ebitda) from S-curve businesses to make up 30% of Ebitda by 2030, up from less than 10% last year, said Mr Buranin.

PTT plans to allocate 300 billion baht to support EVs and other non-oil businesses, he said.

Mr Buranin was speaking during an event entitled "PTT Group Tech and Innovation Day" at PTT headquarters in Bangkok on Wednesday.

The event, presided over by Energy Minister Supattanapong Punmeechaow, updated visitors on new technology and cooperation on new businesses.

PTT plans to initially help other EV makers investing in Thailand to assemble electric cars, rather than spend a large sum to set up a full-fledged facility to make EVs under a new brand, Auttapol Rerkpiboon,president and chief executive of PTT, said earlier.

PTT's wholly-owned Arun Plus Co co-established Horizon Plus to oversee the EV assembly business.

Arun Plus made a 51% investment in Horizon Plus, with a 49% investment by Taiwan-based Hon Hai Precision Industry Co, a multinational electronics manufacturer.

Hon Hai Precision Industry, known globally as Foxconn, is keen to develop an EV business and chose Southeast Asia as its target market.

Mr Buranin said other new S-curve businesses are also gaining momentum.

Innobic (Asia), the biotechnology arm of PTT, teamed up with experts from medical schools and pharmaceutical officials to commercialise cancer medicine and anti-ageing cosmetics.

According to Mr Buranin, also chairman of the board of Innobic (Asia), the company decided to spend 1 billion baht to support the construction of a plant-based protein production facility in Ayutthaya.

Innobic and Nove Foods Co, a subsidiary of SET-listed NR Instant Produce, a producer of vegetarian and plant-based food, formed a joint venture named NRPT to make plant-based protein, which is viewed as a future food for consumers.

 

Source : Bangkok Post

Finance Minister Arkhom Termpittayapaisith has projected that Thailand’s economy will grow by 3.8% in 2023, with the rebound of the vital tourism sector contributing to the growth.

Speaking on a Radio Thailand program, Minister Arkhom said the increase in domestic spending and an acceleration in investment in large projects would further boost growth.

According to the finance minister, tourism in particular is expected to play a crucial role in the country’s economic recovery. The country is now projected to receive 27.5 million foreign visitors this year, following the arrival of 11.15 million visitors last year. This figure, while promising, is still below the nearly 40 million foreign visitors the country had in 2019 before the pandemic.

The minister earlier said the nation’s economic growth could exceed the current forecast with the expected return of Chinese tourists. However, he cautioned against aggressive interest rate hikes, which could lead to increased business costs and household debt.

The country’s headline inflation is further expected to fall within the central bank’s target range of 1% to 3% this year, owing to government measures and lower food prices. He noted, however, that despite the fall in export volumes, an exchange rate of 34 to 35 Thai baht per US dollar, as recorded last week, would be beneficial for export prices.

 

Source : NATIONAL NEWS BUREAU OF THAILAND

The government has approved the Indo-Pacific Economic Framework (IPEF) to serve as a foundation for the Bio-Circular-Green (BCG) economic model by promoting balanced and sustainable economic growth.

Government Spokesperson Anucha Burapachaisri disclosed that the Cabinet recently approved a draft of the negotiation framework for the IPEF as a guideline for determining Thailand’s stance and cooperation under the framework. This included ratification of four IPEF Ministerial Statements dated September 8-9, 2022. It also includes the formation of a committee to push the implementation of the IPEF framework by the Ministry of Foreign Affairs and related agencies tasked with following up on relevant measures under the framework.

A draft of the negotiation framework for IPEF consists of four cooperation pillars comprising Trade, Supply Chain, Green Economy and Fair Economy. The goal is to reap the greatest benefits and foster cooperation among nations in order to achieve their goals in various fields.

The government spokesperson noted that IPEF negotiations are Indo-Pacific economic cooperation negotiations, which are different from free trade agreements and do not involve market access issues. The negotiations will instead focus on strengthening and connecting supply chains between Thailand and partner countries in the region, clean and environmentally friendly economic development, and cooperation on anti-corruption and transparent tax management.

In addition, cooperation under the IPEF is in line with Thailand’s economic development guidelines. Furthermore, the IPEF will enhance the implementation of international obligations in multilateral frameworks, address new challenges, and prepare Thailand to negotiate high-standard trade agreements in the future.

The IPEF is a framework for economic cooperation proposed by the United States that currently involves 14 regional participants, including Thailand.

 

Source : NATIONAL NEWS BUREAU OF THAILAND

The World Chinese Entrepreneurs Convention will be taking place in Thailand this year. Related private firms and Thai authorities expect this meeting to yield no less than 10 billion baht worth of additional investments in Thailand.

Thailand will be hosting the 16th World Chinese Entrepreneurs Convention (WCEC) on 24-26 June at Queen Sirikit National Convention Center in Bangkok. The organizers are the Thai-Chinese Chamber of Commerce and related agencies.

The upcoming convention will be the first-ever WCEC held in 4 years, following the outbreak of the coronavirus.

 

10 billion baht worth of additional investments

Minister of Commerce Jurin Laksanawisit said this convention will help improve the cooperation on trade and investment, with deals resulting in a total of at least 10 billion baht worth of additional investments expected from this convention.

The Thai-Chinese Chamber of Commerce has already invited major trade organizations around the world, major Chinese businesses, and Thai firms to participate in this convention.

 

4000 attendees expected to arrive in Thailand

Around 4,000 people are expected to arrive in Thailand for this convention, resulting in an event-related cash flow of no less than 500 million baht.

China is Thailand’s number one trade partner, with the trade value between both countries in 2022 recorded at 2.69 trillion baht, a 1.53% year-on-year growth. This trade value amounts to 17.9% of all trade between Thailand and other countries.

 

Source : Thailand Business News