• 97% of companies believe the ASEAN Economic Community will be formed
• 76% have an ASEAN-orientated strategy and increasingly manage the region as one integrated economic bloc
• Singapore remains the favored ASEAN hub, where 80% of firms locate their regional head office
• Indonesia and Myanmar were cited as the most preferred destinations for new factories over the next five years, followed by the Philippines and Vietnam
A Baker & McKenzie report released on Jan 14, 2015 reveals that ASEAN integration is driving multinational companies to take a more pan-regional approach with their strategies, as business leaders are increasingly confident that the vision of the ASEAN Economic Community (AEC) will be achieved.
Re-drawing the ASEAN map: How companies are crafting new strategies in South-east Asia” is based on a survey of 171 companies from a broad mix of industries, with no sector accounting for more than 12% of respondents. Respondents generally worked at large companies: 41% came from firms with revenue of more than US$10 billion, and 37% from firms with revenue of between US$1 billion and US$10 billion. 86% of the respondents came from non-ASEAN companies. Around 60% of the companies were primarily B2B, and 40% primarily B2C. Nearly half the companies (47%) did manufacturing in ASEAN. The report is sponsored by Baker & McKenzie and CIMB, and the research was conducted by the Economist Corporate Network, a division of the Economist Intelligence Unit.
88% of the surveyed companies in this survey indicate ASEAN integration is important to their strategic planning (vs. 83% in 2012), and 76% have a strategy oriented around the ASEAN. The report highlights how more companies can be expected to expand their investment and footprint across the ASEAN in the near future as a result of the significant opportunities the region offers international investors, be it access to new markets and the rising middle class, or deeper talent pool.
The region is home to nearly 10% of the world’s population ( 600+ million people) and currently ranks as the world’s seventh largest economy. It is poised to become the fifth largest economy by 2018, with an expected annual average growth rate of 5.6% between 2013 and 2018, surpassing growth rates in mature economies such as the United States, the European Union and Japan.
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