A newly released AustCham ASEAN survey of businesses in the 10 markets of the Association of South East Asian Nations (ASEAN) found Australian firms are bullish about the outlook and opportunities.
“The share of Australian firms planning to increase their presence [in ASEAN] significantly has almost doubled.”
Just less than 90 per cent of Australian firms plan to increase their trade and/or investment in ASEAN over the next five years, while 44 per cent said they intended to increase their presence significantly.
Compared with 2016, the share of Australian firms planning to increase their presence significantly has almost doubled.
The survey was launched on the eve of the ASEAN Special Summit, hosted by Australia for the first time in the history of the 40-year partnership.
Speaking at the launch of the survey in Sydney, Australia’s Trade Minister Steven Ciobo said Australia is currently facing the most active trade agenda it has ever seen.
“This (survey) shows there is a very significant appetite to engage with ASEAN,” he said. “I am confident that Australian businesses won’t shy from the challenges of doing business in ASEAN and rather embrace them.”
The region is not without challenges. The survey noted restrictions on ownership and investment and access to skilled labour.
However one historical concern - currency volatility - is no longer seen as a major issue given improved macroeconomic stability in the region.
Greg Thomas, CEO of Linfox International, said the logistics company had 25 years’ experience across southeast Asia and had found, with such a varied group of countries, strong local partnerships are key.
“I think it’s also important that you reinvest your profits back into the region where you work, and that’s something Linfox is proud of,” he told a panel discussion at the event.
ANZ Group Executive, Institutional, Mark Whelan sees significant business and economic opportunities in the region, driven largely by population and income growth as well as urbanisation.
“ASEAN is forecast to become the fourth largest economy in the world after the EU, US and China by 2030, while its populating is expected to rise to 726 million compared with 650 million now,” he said.
“What comes with that is a changing market, for example many more people in the region are wanting to eat more protein, and they naturally look to suppliers they can trust.”
“And the Australian brand which is clean, green and reliable really plays into that.”
Whelan said the area of agtech, where Australia is well positioned to take a leading role in the region, was a significant opportunity.
This could be through precision agriculture, using tools such as drones to manage crops better, and improved storage capabilities to help reduce waste.
“In terms of food safety, major improvements will come through blockchain providing greater levels of food traceability,” Whelan said.
“The consumer will have a complete knowledge of the full origin and supply chain of their food.”
The survey also found ASEAN’s Australian business community is diverse, with professional services accounting for the largest proportion of Australian firms in the region, followed by manufacturing, travel and hospitality, and education and training.
It said 41 per cent of Australian firms in ASEAN report annual revenues of less than $A5 million, while more than 15 per cent have annual revenues over $A100 million.
Elizabeth Rudall is a bluenotes contributor