The Indonesia Cold Storage Association (ARPI) said as most cold-storage components were imported, the government should follow up on the regulation up by obliging investors to open component manufacturing plants in the country.

“I agree with the policy, but suggest the government require investors to use more local components and workers,” Indonesia Cold Storage Association (ARPI) chairman Hasanuddin Yasni said over the weekend.

According to ARPI data, cold-storage capacity in Indonesia currently stands at 7.2 tonnes of fisheries products, 1.9 million tonnes of chickens and 400,000 tonnes of beef, far below the country’s production, which reaches 14 million tonnes in fisheries, 3.7 million tonnes of chickens and 580,000 tonnes of beef.

“Currently, there are only five manufacturers operating, with low-capacity machines. The government needs to grant tax incentives to attract others,” Hasanuddin said.

Maritime Affairs and Fisheries Minister Susi Pudjiastuti was reported by local media as saying that 12 investors from several countries in Europe, including Denmark and Norway, had expressed interest in entering the cold-storage business.

The presence of private investors, especially foreigners, is considered crucial, since the government last year allocated only 235 billion rupiahto build 58 cold storage facilities and 38 ice factories countrywide last year.

Hasanuddin added that cold storage required investment of between US$500 and $600 per million cubic meters, with a minimum average retail storage capacity of 1.1 billion cubic meters CBM and wholesale storage of 3 billion cubic meters.

“Foreign investors need to build their own electricity sources using alternative energy to support the cold storage industry,” he said, adding that the government also needed to direct investors to develop plants in remote areas where cold storage facilities remained rare.

Remote areas of the archipelago nation face numerous difficulties, ranging from lack of electricity and fuel supply to poor transportation infrastructure and connectivity. Under the administration of President Joko “Jokowi” Widodo, remote areas, especially in the eastern part of Indonesia, are seeing a renewed chance for coastal and maritime development thanks to the reinstatement of the “maritime axis” doctrine. The development of mega infrastructure, such as seaports, power plants and maritime highways, is the government’s priority program to address problems in the long-neglected and underdeveloped regions.

Voicing similar support for the new policy, the Indonesian Employers Association (Apindo) noted that the government needed to ensure sufficient supply of fish for exports to benefit from the newly expanded cold storage facilities.

Apindo head of fisheries Thomas Darmawan said the latest ban by the Maritime Affairs and Fisheries Ministry on the operation of large vessels to catch fish in Indonesian waters could threaten the supply of fish for export.

Thomas estimated that fish exports fell to $4 million in 2015 from $4.64 million in 2014.

In a tenth economic stimulus package announced on Feb. 11, the government revised the country’s negative investment list (DNI), covering sectors in which restrictions on foreign investment apply.

Under the revision, cold storage is among the 35 business sectors opened up completely for foreign investors. In the previous DNI regulation, foreign ownership of cold storages was limited to 33 percent in Sumatra, Java and Bali and 67 percent outside those regions.

Ascott said that through its alliance with Dongfu Investment Development Corporation – a subsidiary of China State Construction Engineering Company (CSCEC) – it will have first right to manage apartments currently under development as well as future projects to be built by Dongfu Investment.

Both parties will draw on each other’s capabilities, resources, brands and sales network to expand in China.

Dongfu Investment’s parent company, CSCEC, is ranked 37 amongst Fortune’s global 500 companies with massive projects from Singapore to United Arab Emirates and South America, said Ascott.

Its partnership with Dongfu Investment follows its recent alliances with Alibaba’s online travel site Alitrip and Tujia.com International, China’s largest online apartment sharing platform equivalent to Airbnb, as well as major developers such as Vanke and Yuexiu.

Said Mr Lee Chee Koon, Ascott’s chief executive officer: “These partnerships will allow Ascott to deepen our presence and build scale in key cities; expand our network to new gateway cities; broaden our reach to even more travellers as well as create new seamless O2O (Offline-to-Online and Online-to-Offline) experiences for our guests.”

Ascott and Dongfu Investment kicked off its alliance with a management contract for the 148-unit Citadines Guoxitai Xi’an which is slated to open in 2018.

Said Mr Kevin Goh, Ascott’s managing director for North Asia: “China is Ascott’s largest market with the most number of properties. We have recorded three consecutive years of expansive growth in the country with more than 2,000 units added year on year. In 2015, we secured over 2,500 units across 14 new properties in China. We are positive that demand for quality serviced residences will continue to grow in China, riding on the increasing domestic travel especially in the first and second tier cities.”

Mr Goh added: “Through our alliance with Dongfu Investment, we will be looking at expanding in cities such as Shanghai and Jinan, tapping on our partner’s major commercial building projects across these cities. Our latest partnership with Dongfu Investment will widen Ascott’s lead as we advance towards our target of 20,000 units in China by 2020.¡¨

Citadines Guoxitai Xi’an is close to Xi’an’s Hi-Tech Industries Development Zone where 1,000 multinational corporations including 40 Fortune 500 companies such as Samsung, Micron, Infineon and NEC are based. The serviced residence is a 10-minute drive to the city centre.

“The good thing about the TPP is that it is not in conflict with the other free trade agreements (FTAs).

“It is an addition to what we already have.

“One of the biggest buyers of Malaysian furniture is the US, and it is part of the TPP.

“In fact, most furniture exports are to countries that are a part of the TPP

“Besides that, one of our competitors is China, and China is not part of the TPP. So, Malaysia will be more competitive in exporting to the TPP countries,” added Gandhi.

The upcoming Malaysian International Furniture Fair (MIFF) 2016, which is the largest trade exhibition of its kind in South-East Asia, is expected to generate export sales of an estimated US$900mil.

MIFF chairman Datuk Dr Tan Chin Huat is targeting a 5 per cent growth in sales for MIFF 2016.

In addition, the ringgit depreciation has benefitted the manufacturing industry. This is because as an exporter, the bulk of the materials used to manufacture furniture is sourced locally. Only some accessories, components and machinery are imported.

Overall, the locally-sourced content of Malaysian-manufactured furniture is very high, which means that the manufacturing cost is denominated in ringgit, while the revenue is in US dollars.

“The value of Malaysian-manufactured furniture has increased by 15.8 per cent, and part of it has been contributed by the exchange gain.

“This is the time for Malaysia to take advantage of the situation to get market share and attract more first-time buyers.

“However, the marketing, branding and positioning of Malaysia’s image as a furniture manufacturer of excellent quality has to be improved,” said Gandhi.

The majority of the people who visit MIFF are boutique buyers, who own small to mid-scale furniture outlets. These boutique buyers are searching for furniture with unique designs.

Malaysian furniture manufacturers’ strength lies in their ability to cater to their buyers’ needs.

Not only are they able to deliver unique products, but they are also adaptable to requirements of a specific city or country.

“Malaysia has also adopted duty-free import and export of furniture, and this is an advantage over neighbouring countries where they have very high tariffs.

“This is a good opportunity for Malaysia to meet its target of becoming one of the largest furniture export centres,” he said.

However, Tan added that there was room for improvement when it comes to being environmentally conscious.

In order to attract more high-value buyers, who are concerned about the environment, Malaysian furniture manufacturers have to take measures to ensure that both the products and manufacturing process are environmentally friendly.

In a series of pilot programmes under the UBM-Alibaba.com collaboration, MIFF 2016 will be the first UBM trade event in which the Alibaba.com Trade Assurance Programme will be introduced, and a total of 100 Malaysian manufacturers have been selected to participate in the three-month free trial.

The free trial will run from March 2016 until May 2016.

“I think this is the first time we are introducing a pilot programme to test how Malaysian exporters can go beyond trade exhibitions.

“This programme will enable suppliers and buyers to develop the business relationship and credit terms as well as attract new buyers.

“The collaboration between UBM and Alibaba entails the development of an app to enhance business-to-business transactions,” said Gandhi.

Initially, the Trade Assurance Programme was exclusively available to China businesses. This is the first time that the programme will be extended to Malaysian manufacturers.

Under the programme, Alibaba will guarantee the quality of the products and delivery time. Should products be of sub-par quality or shipment arrival overdue, Alibaba will compensate the purchaser.

This would be especially helpful for first-time buyers and to introduce more buyers to the Malaysian furniture market.

Besides that, the programme will encourage more exports from Malaysia and make it easy for people to buy from Malaysia.

The amount of assurance that will be given is a one-time delivery and payment between US$40,000 and US$100,000, depending on the company’s size and other matters.

MIFF 2016 will see participation from 500 exhibitors from 140 countries, some of which are from China, Taiwan, South Korea and Indonesia.

“For the first time, the upcoming fair will include six Japanese companies that will be featuring their products.

“This will also be the first time that Japanese companies are participating in an international trade fair,” said UBM and MIFF general manager Karen Goi.

MIFF is the oldest international trade fair in Asia, with the upcoming MIFF 2016 event being the 22nd edition since its debut in 1995.

According to Bank Central Asia (BCA) chief economist David Sumual, the TPP could be a way to boost advanced industry. The agreement might attract advanced technology-based investors from the TPP member countries to invest in Indonesia and develop advanced industries.

“If we relied heavily on China, our exports will be mainly commodities, cheap low-value-added products with a lack of technology but lots of environmental issues. We need the TPP to balance our trade,” he said to thejakartapost.com in Jakarta on February 18.

Aside from that, developed countries in the TPP such as Japan and the US were leaving the labor intensive sectors in which Indonesia is good, such as in making garments, textiles and footwear. It opened an opportunity for Indonesia to survive in the competition.

However, David supported the government’s stance not to rush to join the TPP and to choose to create a special team to assess the costs and benefits. “It is better to take a longer time before deciding, especially as Indonesia is not ready yet. But do not take too long, as we may lose momentum.”

Also of concern were the new economic dynamics among the TPP members. In Japan, Abenomics has yet to revive the economy and has lost public confidence amid industrial losses, while in the US debates on the TPP were heating up as more presidential candidates attacked the agreement.

In Japan, Abenomics is being challenged because Japan’s economy failed to escape deflation amid falling profits and massive layoffs among Japanese corporations. The Bank of Japan even launched a negative interest rate recently to combat deflation.

In the US, Hillary Clinton recently criticized the trade agreement, along with other presidential candidates such as Bernie Sanders and Martin O’Malley. Even President Obama’s party, the Democratic Party, opposed the trading agreement.

The TPP is supposed to be ratified as soon as May or June this year after being formally signed in New Zealand in January.

“Parliament of the TPP members need to ratify it and it takes more than two years. Until then, the agreement will not come into effect yet. It gives us time to asses the TPP,” Institute for Development of Economics and Finance (INDEF) economist Berly Martawardaya said.

A February 18 research titled “Surveying Asean’s Infrastructure Gap” authored by Wei Zheng Kit, Jun Trinidad and Helmi Arman warned, however, that further progress in tackling corruption could not be guaranteed in a post-Aquino government. “Weak governance, should it recur post-Aquino, could discourage private sector participation in PPP projects,” the research said.

The research noted that the abolished “pork barrel” system, which funded discretionary projects of lawmakers, along with other corruption cases had weakened the government’s effort to widen the base for tax compliance and collections, undermining its ability to fund infrastructure spending.

Yet for an archipelagic country like the Philippines, Citi said the infrastructure challenges and associated budgetary and investment costs might be significant and multifaceted—ranging from transport/logistics inadequacies, to basic sanitation/electricity supply.

“With a relatively low tax-to-GDP (gross domestic product) ratio of 14 per cent, PPP funding would be needed to fund big ticket infrastructure projects, if crowding out of other spending needs or fiscal deterioration is to be avoided,” the research said, noting that the outgoing Aquino administration had jump-started the PPP program with 13 projects totaling P313 billion awarded so far.

In estimating that the economic potential of the PPPagenda would augment GDP growth by 1.7 per centage points annually, Citigroup calculated potential output gain assuming that P108.6 billion in annual construction activity would arise from PPP project implementation and positively shock the system. “This can easily offset the P2.4-billion daily losses due to traffic congestion and pollution,” the research said. “Construction will be an obvious beneficiary, although manufacturing and other sectors stand to gain as well.”

Average GDP growth rate under the Aquino administration averaged 6.2 per cent, improving from 4.8 per cent under Gloria Macapagal-Arroyo, 2.3 per cent under Joseph Estrada, 3.1 per cent under Fidel Ramos and 3.4 per cent under Corazon Aquino.

A potential 1.7-per centage annual boost from infrastructure spending is thus seen bringing GDP growth to an even higher trajectory, creating more jobs and lifting more people out of poverty.

PPP funding for big-ticket items has enabled the Philippine government to pursue public investment projects without causing government debt to escalate, Citigroup said, adding this strategy had reversed the declining debt-to-GDP trend.

Speaking at the seminar on Vietnam’s opportunities and challenges when the Trans-Pacific Partnership agreement (TPP) comes into force held by the International Business and Law Academy, Prof Dr Don Nang, former head of the Ministry of Science and Technology’s Department of Legal Affairs, said several studies have found that the TPP would create huge economic opportunities for Vietnam, especially in trade and investment.

Resource SituationBut it would also face massive challenges since it is the least developed among TPP members, he said, adding that the “productivity, quality and competitiveness of Vietnamese goods and services are far behind that of other TPP member countries.”

Technological skills and competence of Vietnamese firms are also inferior to their counterparts in other countries, he said.

“According to the ministry’s statistics, the country has nearly 600,000 enterprises, with more than 90 per cent of them being small and medium-sized and most of them used outdated technologies.”

Little research is done in the country to innovate technologies and make modern machinery and equipment, he said.

Imports of these products have increased significantly but, according to a survey by UNDP, account for less than 10 per cent of the country’s total imports compared to 30-40 per cent for other countries, he said.

Besides, most of the imports are from China, he said, noting that “Chinese machinery and equipment are rather old and obsolete and cause low productivity and pollution during industrial production.”

He called on relevant agencies to act quickly to help businesses and sectors upgrade technologies to yield quality products and services and enable Vietnamese firms to take part in the global value chain.

“Importation of outdated technologies must stop, and speeding up training and developing skilled human resources and technological workers is an imperative,” he said.

Truong Dinh Tuyen, a former trade minister, said the TPP would bring opportunities, but opportunities cannot by themselves turn into benefits or market strength.

It would depend much on how Vietnam takes advantage of the pact and copes with related problems, and only with appropriate efforts would the country be able to achieve its potential and overcome challenges, he said.

State agencies and businesses must thoroughly understand the country’s commitments to other TPP member countries to avoid lawsuits, he warned.

Garment and textile sector

Le Dong Trieu, general director of the Gia Dinh Textile and Garment Corporation, said the country earned US$27.5 billion from garment and textile exports last year, a year-on-year increase of 9.4 per cent.

Exports to TPP member countries were worth more than $14.7 billion, he said.

Once the TPP comes into force, import tariffs would fall to zero, opening up more opportunities for Vietnamese firms to export to these countries, he said.

But there would be challenges in the form of stipulations related to origin, quality, chemical use and others under the TPP, he said.

To enjoy the benefits, Vietnam must quickly develop the garment and textile supporting industry, encouraging investors to invest in sectors that have remained weak, and develop a complete supply chain for the domestic garment and textile industry, he said.

Companies should invest more in upgrading production technologies, designs and quality to achieve a firm foothold in the global market, he said.

The cooperation stipulates that GAD will provide Jaguar XJ and Range Rover models as the airport shuttle service for Garuda’s first-class passengers for routes between Jakarta and Amsterdam, London and Jeddah.

Garuda maintenance and information technology director Iwan Joeniarto said the routes in question had eight first-class seats, 20 and 30 percent of which were generally taken up.

The routes are plied by B777-300ER with a total of 314 seats.

“With this service, with the Jaguar and Range Rover brands, we aim for 50 percent in load factor,” Iwan told the press over the weekend.

For the first six months of the service, starting on March 1, GAD will provide a free trial of its shuttle available for passengers in Greater Jakarta.

“We will then evaluate the customers’ feedbacks on this service,” he said.

The company deems the service important to provide comfort to premium airline passengers, who have to deal with traffic on their way to airports.

The complimentary service is also expected to boost demand for seats on Garuda flights to Europe and the Middle East.

Garuda has secured flight slots at London’s Heathrow Airport beginning in March, moving away from the less strategic Gatwick Airport.

The company aims for passenger growth this year to be at around 10 percent.

Data from the company revealed that Garuda transported around 17.69 million passengers in the first nine months of last year, a 13.62 percent increase year-on-year (yoy) from 2014. Of that number, 3.18 million passengers traveled on international routes, a 9.7 percent yoy increase.

In total, 23.5 million passengers were transported by Garuda Indonesia last year, up 9.3 percent from 21.5 million in 2014.

It booked a net profit of US$76.48 million last year, a 120.67 percent jump yoy from a $370.05 million of loss recorded in the previous year.

The firm has also recently received a five-star rating from UK-based research company Skytrax for the second year, one of only seven airlines in the world awarded similar acknowledgement.

GAD chief operating officer Roland Staehler said the brand would benefit greatly from working with Garuda.

He said that the company still believed in the growing premium market, amid slowing car sales.

The company said it was flexible regarding the number of cars reserved for the service, with two cars for the first phase allocation.

Announced by the Singapore Workforce Development Agency (WDA) on Monday (Feb 22), the topics under the Advanced Manufacturing Series will cover areas such as advanced robotics and automation, additive manufacturing, and optical and laser engineering.

More than 400 technical managers, engineers, assistant engineers, product designers and technical specialists from both smaller companies and multinational corporations are expected to be able to attend.

The events will be run by five institutes which signed a memorandum of understanding (MOU) with WDA on Monday. They are:

– The Agency for Science, Technology and Research’s (A*Star’s) Advanced, Remanufacturing and Technology Centre

– A*Star’s Institute of High Performance Computing,

– The Nanyang Technological University’s (NTU’s) Centre Optical and Laser Engineering,

– NTU’s Singapore Centre for 3D Printing

– Nanyang Polytechnic

Demand for the series will be reviewed after the first year to see if the programmes will be continued. WDA will fund up to 70 per cent of the course fees for Singapore citizens and Permanent Residents, and up to 90 per cent if they are from small and medium-sized enterprises.

Ms Low Yen Ling, Parliamentary Secretary for Trade and Industry and Education, said at the MOU signing ceremony that Singapore must keep abreast of global trends such as 3D printing and the Internet of Things.

“Besides investing in advanced manufacturing capabilities to upgrade our companies, we also need to invest in upskilling our people,” she added.

“This will enable our workforce to take advantage of the new and exciting job opportunities in advanced manufacturing, which will require specialised, cutting-edge skills.”

For example, in remanufacturing for the aerospace industry – which reduces waste by allowing parts to be repaired and reused instead of being replaced – robotics software engineers and workers, who can optimise production chains from market to manufacturing floor, are needed, said Adjunct Professor Tan Sze Wee, executive director of the Science and Engineering Research Council at A*Star.

“We hope to attract Singaporeans to look at engineering as an exciting career,” he said.

The manufacturing sector contributes about one fifth of Singapore’s gross domestic product and employs over 500,000 workers.

Somsavath develops, distributes, and markets cosmetics under the brand name ‘SK Herbal’. SK Herbal’s line of products has rapidly become a quite well-recognized brand in Myanmar, garnering positive responses and reviews everywhere it is sold.

Of her guiding philosophy, Somsavath says: “I love to maintain good personal condition all the time. This means that I take steady care of my health, mind, appearance, and spiritual well-being. I’ve always placed high priority not only on my own health and beauty, but on sharing these vital things, as well. It’s for this reason that I conceived of and launched a personal care brand to support others in improving their own lives, as I have mine.”

Product development

In my experience, high price does not necessarily mean high quality. With this in mind, I made it my goal to develop affordable, good quality products which are rich in natural ingredients. At the outset of this enterprise, I did a great deal of research into a variety of different beauty companies from Thailand and Korea. After careful product analysis and many factory visits, I selected the best companies available and explained my vision to them, and the rest is history.

When I arrived in Myanmar for the first time, I fell in love with its culture and people – the huge variety of cultural and traditional events is truly amazing. Myanmar’s people generally have a very welcoming nature. Between these basic qualities of the people and the culture, and the fact that Myanmar’s population is of over 50 million, I recognised the possibility of a good opportunity for investment.

As I undertook deeper analysis of Myanmar’s market over the period of a full year, I noticed that there were a great many over-priced products which were of unimpressive quality- low value for the cost. This is when I realised that Myanmar was the place where my goals and the ideal market conditions could truly meet.

Strong market expansion

After setting up her company in 2014, Somsavath began distributing her products in Myanmar in 2015. To capitalise on her brand’s rapidly growing momentum, she debuted her line of cosmetics in Laos in early 2016, and in the near term intends to continue this expansion across Asia. She is currently considering introducing a new round of investment of US$10 million into the business. These funds would serve to both consolidate her brand’s strength in Myanmar and accelerate expansion into the wider Asian market. While she is of course pleased that her business is growing, Somsavath maintains that her greater ambition remains to make SK Cosmetics a globally-recognised brand.

Regional outlook for Lao businesses

Although Somsavath is concerned that Laos could struggle to compete in the Asean market initially, she remains confident that in the near future the Lao people will be able to produce more value-added products and brands that will raise the commercial and economic profile of the nation. Overall, she feels quite optimistic that the Asean Economic Community will provide more and better opportunities for Lao people to significantly increase their business activities in the region.

Time to explore

Having enjoyed great success in Laos’ real estate development sector since 2004, Somsavath decided in early 2013 that it was time to both diversify her personal business portfolio and to take on a new challenge. She was ready to try her hand at not only a new type of business, but also in a new country. Creating and launching a new cosmetics brand in Myanmar fulfilled all of her purposes at once.

As a result of her personal experience, she now urges and supports other Lao people to bring their attention more to identifying and seizing any opportunities that may come their way. She is concerned that if the people of Laos do not work actively to become more aware of changes and new trends both domestically and internationally, they may fall behind other countries in ter of innovation, and lose the opportunity to develop a competitive edge in the rapidly developing Asean region.

Somsavath acknowledges that it is not easy to succeed in foreign markets. To be successful in one’s own country is already quite challenging, but to really make it in another county is even more difficult. But no matter where you are, there is no substitute for persistence and hard work. She identifies two primary potential causes for the failure of an enterprise. One is poor decision-making, which may result from not working hard enough to adequately understand the full range of market variables and conditions. The other is giving up too quickly. She explains that “as entrepreneurs, leaders, and bosses every decision we take really matters. Because the whole company will move in the direction that we decide, the most difficult thing is to determine the best action to take, and good decision-making is the result of education, experience, and tenacity.”

Advice to young people

Somsavath calls most especially on young people to be on the lookout for new ideas and opportunities. The growth of easy access to information in the online world removes a major barrier to entry into nearly any kind of business anywhere. She recommends that aspiring entrepreneurs take one idea and really bring their full attention to it, to put all their time and energy toward making it happen, and above all to never lose focus.

She elaborates this view in saying “business is always competitive; we are not just trying to compete with our competitors but also with ourselves and our own limitations. There are many difficulties and challenges along the way, the key is to overcome them as well and as quickly as possible.

Somsavath wishes to share two final pieces of advice. First, she identifies the importance of the people we each meet during the course of our individual journeys. “We will meet many different kinds of people along the way, each bringing with them their own particular qualities and difficulties. We must make the best of whatever we find and, at some point, we will need to find our own strength and inspiration, to stand and move forward through it all, learning all the way.” Second, she says “today no matter how big the problem we face, it is essential to not worry too much. Instead of expending energy in worry, look forward and think how to solve the problem, and ignore the sources of negative energy. Keep moving, thinking positively, and believing in the future because, in the end, optimism and kindness will always win.”