KUALA LUMPUR – According to a survey commissioned by Standard Chartered for its Borderless Business: Intra-ASEAN Corridor, 49% of survey respondents selected Malaysia as one of the countries offering the best expansion opportunities in ASEAN over the next 12 months.
The report also cites automotive, healthcare, and digital services as key growth sectors for Malaysia.
“The country has started making headway in developing capabilities to spur growth both in the electric vehicles segment and data centre supply. Malaysia is also seen as a leading medical device manufacturing hub and a regional market leader in medical tourism,” said Standard Chartered in a statement on July 19.
The majority of ASEAN companies focusing on intra-regional opportunities expect robust business growth in the region over the next 12 months (99% of respondents expect growth in production and 96% anticipate growth in revenue).
Access to the large and growing ASEAN consumer market (69%), access to a global market enabled by a network of Free Trade Agreements (59%), and availability of abundant and skilled workforce (49%) were among the most important drivers for expansion across the region according to the senior executives of the surveyed ASEAN companies.
“With the Regional Comprehensive Economic Partnership (RCEP) expected to attract more investments into ASEAN, all respondents said that they are planning to increase their investments over the next 3-5 years. Within ASEAN, Malaysia is a major hub for investments, being the third largest source for intra-ASEAN FDI in 2019,” said Standard Chartered.
The survey also shows companies recognising a wide range of risks in the region. The top three identified risks are the COVID-19 pandemic or other health crises (75%), geopolitical uncertainty and trade conflicts (60%), and the slow revival of the economy and the drop in consumer spending (49%).
The respondents also agreed that adapting their business model to industry practices and conditions within ASEAN (67%), building relationships with suppliers and adapting supply chain logistics (66%), as well as understanding regional regulations, payment methods and infrastructure (53%) are the most significant challenges they anticipate in the next 6-12 months.
To drive resilient and rebalanced growth in ASEAN and to mitigate these risks and challenges, the surveyed executives identified entering new partnerships / joint ventures to increase market presence (53%), driving sustainability and ESG (Environment, Social and Governance) initiatives (53%) and executing digital transformation programmes (52%) as the most important areas for their companies to focus on.
To support their growth, these companies say they are seeking banking partners with strong cash management capabilities (52%), one-stop corporate financing and capital-raising services (52%), and extensive trade financing services (47%).