Date Created: 25 May 2012
“It’s still seen in some ways as a frontier ground, but it’s probably the fastest growing region in the world and a great place to do business.”
South East Asia contains some of the world’s richest and most dynamic countries as well as developing nations with massive potential, which makes it an enticing prospect for Scottish companies looking to export to the region.
Opportunities in this area are enormous and, in many ways, there for the taking.
South East Asia consists of 10 countries, which are members of the ASEAN (Association of South-eastern Asian nations) grouping: Singapore, Burma, Brunei, Thailand, Indonesia, Laos, Cambodia, Vietnam, the Philippines and Malaysia.
Most of the trading activity between Scotland and the region involves our companies doing business in the territory.
The number of Scottish companies establishing a presence in the region has been growing by 25 percent a year over the past four years.
Jason Grant, Regional Manager for South East Asia for Scottish Development International, said: “One of the reasons for the growth is that some of the countries are seen as low cost economies.
“Places like Vietnam can now manufacture goods more cheaply than China, and financial services are being outsourced to the Philippines.
"It is also an economically expanding market, with populations increasing in prosperity; they have money to spend and a strong awareness of what they want to spend it on. In Indonesia alone, for example, there is now a middle class totalling some 75 million people."
Key opportunities
One of the major areas of opportunity is in oil and gas. Scottish companies operating in this sector have a strong history of being at the cutting edge of technology, and particularly of extracting last reserves and of providing servicing support.
This makes them highly attractive to countries such as Malaysia, Indonesia and Thailand. Singapore does not have any reserves of its own, but has forged a reputation as a base for the industry in the region.
“The industry is perhaps 10 to 20 years behind us in technology terms,” Jason Grant explains. “They have no experience in deep water environments. That means we have plenty of opportunity to export our expertise.”
Scottish companies such as Wood Group and Subsea 7 are already operating in the area. With some 40 percent of offshore wells in Asia and companies in the Aberdeen area seeking to aggressively expand overseas in the years ahead, there is plenty of scope for moving into this marketplace.
Knowledge transfer
Another area of significant opportunity is in education. Scotland’s history and legacy of excellence in this area means that many of our higher education institutions are pushing at an open door when it comes to establishing a presence in this part of the world.
Edinburgh’s Heriot -Watt University launched its first Asian campus in Malaysia last year. The demand for quality teaching and degrees is massive. Singapore alone has some 13 universities.
Malaysia and Vietnam are also hungry for good university provision, and Scottish Development International will be exploring the market in Indonesia later this year.
“Most Scottish universities are keen to move in. We’re currently talking to Vietnam about oil and gas training opportunities and we’ve just done a market report on the hospitality industry there. Napier and Queen Margaret universities are already in this marketplace and looking for ways of developing partnerships.”
Demand for Scottish food and drink
There is a real chance to develop the food and drink supply chain in the area – Singapore in particular is a huge re-exporter of goods and ships whisky out across Asia and beyond.
“We need to educate consumers here about what malt whisky is and how it is differentiated from bulk standard blends,” says Grant.
"Scottish seafood is popular, with a local demand for trout and salmon in particular. Confectionary, too, has real potential."
“It’s still seen in some ways as a frontier ground, but it’s probably the fastest growing region in the world and a great place to do business.”
Further insights in SE Asia's lucrative markets and support to help you do business in the region