AS A REGION with 600 million people and trade valued in excess of $2 trillion, Southeast Asia remains an attractive market for investment – including foreign direct investment in the food & beverage sector.
The five biggest developing economies in the Association of Southeast Asian Nations (ASEAN) – Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam – each have a thriving food manufacturing sector which serves an increasingly urbanised market and a growing population of young consumers with rising disposable incomes. Singapore, of course, is the technology and investment centre of the region.
Even Brunei is positioning itself as a halal hub, with the government heavily invested in developing the industry and marketing the Brunei Halal brand. Growth rates for Cambodia, Laos and Myanmar are meanwhile expected to improve as their government open their economies to further trade and investment.
As the economies in Europe continue to flounder, and the United States struggles to get back on track, emerging markets in the region have become a magnet to set up shop – whether as a place to manufacture more cheaply, expand markets for consumer goods, or to supply technology.
Shoring up domestic gains
Although the International Monetary Fund cut growth forecasts for developing Asia to 6.7% this year (vs. 7.1%) and to 7.2% in 2013 (vs.7.5%) last month due to “tepid growth prospects in major advanced economies and a downshift in China’s and India’s growth prospects”, governments in SEA are shoring up domestic gains. Growing trade amongst ASEAN members is also an encouraging sign that the region will be able to weather the global economic doldrums.
Even with a slowdown on regional exports, for instance, some products will still be in demand – such as fish and seafood. The global market for seafood is forecast1 to reach US$429.8 billion by 2018, driven health concerns, improvements in shipping, and innovation in aquaculture make products accessible and affordable. Asia is leading the production and exports of wild, capture and farmed fish making an important contribution to the food chain of the region along with the alleviation of poverty and generating employment. In the scenario, seafood market in Asia-Pacific is slated to expand over the years at a steady CAGR of 4.4% through 2018.
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