POST SEA - LATAM Conference 2015
The ALC would like to extend our heartfelt gratitude to all the partners, supporters, sponsors and participants who made this Conference a success.
We hope the Conference participants gained critical insights into the dynamics of Southeast Asia and Latin America Markets. The ALC looks forward to future engagements in 2016.
H.E. Manuel Gerardo Talavera Espinar, Ambassador of Peru with Ms Sheryl Foo, Founder and Director of the ALC
Ambassadors of Latin America
OVERVIEW of the SEA-LATAM Conference 2015
SEA-LATAM CONFERENCE 2015
In partnership with the Latin American Chamber of Commerce and the INSEAD Emerging Markets Institute, the ALC brought together government and trade representatives, key industry leaders, 100 SME executives and industry thought leaders in a day of sharing sessions and talks on business opportunities for emerging markets.
In her opening speech, the Founder and Director of ALC, Ms. Sheryl Foo, observed that there is “a need to understand what markets to enter, what business model to adapt, and how to locate independent parts of the supply chain to exploit the advantages of specialised production.” With themed panel sessions, the conference addressed important issues pertinent to emerging markets in the Latin American region such as business development strategies, insights into the Pacific Alliance and Brazil, addressing possible setbacks while offering viable trouble-shooting options.
Mr. Emmanuel Daniel, Founder and Chairman of The Asian Banker, attributed growth of countries in four dimensions: trade, infrastructure, financial infrastructure and consumption, and identifying trade as the beginning of all linkages. Throughout the conference, much talk went towards encouraging SMEs and investors alike to make the step towards a fully integrated economy. Seizing trade opportunities was mentioned to be of paramount importance, as these opportunities are aplenty for emerging markets in Southeast Asia and Latin America, depending on whereabouts on the industry value chain they want to be involved in. That being said, trade is but a stepping-stone. More meaningful linkages are necessary for sustained growth and success, with mutual investments at the forefront of establishing connections.
PROFILE OF LATIN AMERICA MARKETS by Ambassadors of Latin America to Singapore
Singapore is the largest ASEAN trading partner with Brazil, 5th in Asia, and 15th in the world. Singapore's investments in Brazil is one of the largest in Brazil.
Brazil's economy is now the 6th largest in the world, and is steadily maintaining this track.
Three ever-present pillars of Brazil's success:
1. Political and economic stability
3. Potential for expansion
A strict rule of law makes Costa Rica an attractive and safe environment for investment. 86.5% of Costa Rica's trade is covered by free trade agreements and currently has investment agreements with 14 countries.
The SGCRETA is a monumental link in the Asia-Pacific region.
Because less than 0.02% of Costa Rica's imports are Singaporean, there is much potential to develop in areas of potential investment in infrastructure, tourism, biodiversity.
Achieving 428% growth of companies since 2000, it also has highly qualified Human Capital with a highly ranked educational system
Being close to North America with easy access to the rest of the world, it is a strategic business location with an excellent business climate boasting efficient trade facilitation and attractive investment incentives.
Mexico has stood out in Latin America as a manufacturer of sophisticated high quality of goods. A total of USD 3.5m is accrued between trade imports and exports of Mexico to Singapore, with a large part from oil and gas (USD 1717m).
In the last 10 years, Singapore has invested over USD 1000m in Mexico and the value of bilateral investments has increased tremendously in the last few years.
Prospectives for Singaporean companies include: promoting real estate developments, hospitality projects, infrastructure related to oil and gas (offshore and on shore) and in the aerospace industry.
GDP growth of Peru has been consistently growing from 2004-2016 together with its international reserves.
Its three main business partners are currently the APEC, Australia, the US, and South America, and Europe. China is the main trading partner of Peru.
Although Singapore-Peru trade has been growing, its participation is very low at less than 1%. However, Peru has established a favorable legal framework for foreign investment allowing unrestricted access to most economic sectors and free capital movement.
Total investments in Peru's economy grew from USD 11.6b (15% of GDP) in 2004 to 52.22b (25% of GDP) in 2014. 2/3 of this comes from the private sector. 1/3 comes from the public center.
INSIGHTS INTO THE PACIFIC ALLIANCE AND BRAZIL
Promising free movement of goods, services, capital and people amongst the 4 member countries (Chile, Peru, Columbia, Mexico), the Pacific Alliance is the integration of economies based on framework of agreements. The main objective of Pacific Alliance is to generate necessary climate to improve business environment to attract growing number of foreign companies especially in Asian markets. Within 3 years the Alliance has committed to eliminate tariffs in the next 7 years, visas to facilitate labor mobility, common embassies and launch an integrated Latin America market creating the largest LA stock exchange.
The following areas were identified as regions of opportunities for Singaporean companies: to address the deficit of infrastructural logistics – ports, roads, airports; the need to improve education, shortage of qualified human resources; to supplant the insufficient number of knowledge clusters – universities, technology centers.
BUSINESS DEVELOPMENT STRATEGIES IN EMERGING MARKETS
The current myth that merging markets are successful with very good implementation, speed, tenacity, execution is the recipe for success was challenged. Instead, what was presented was for SMEs to develop strategies of capability to be competitive with the more established businesses.
Concurrently, knowledge of the local market is vital to successful implementations and establishing connections with local partners in Southeast Asia and Latin America is the key to this success. These partnerships can be established by contacting similar enterprises, and also with people within similar ethnic communities.
Technology was hailed as the enable of innovation, especially for SMEs. Four identified factors included: online platforms for businesses, real time analytics, social media to capture customer experiences and enable information sharing, as well as a cloud to reduce complexity of business infrastructure.
SUPPLY CHAIN AND LOGISTICS IN EMERGING MARKETS
Key questions that a SME should ask involve what presence would it maintain in market? Apart from picking the right market, how does it balance its company based on the regulations and limitations of the type of activity it is allowed to conduct?
Managing labor was also an issue of concern. Because the supply chain in Southeast Asia and Latin American industries are relatively young, companies should pick and groom young professionals with industry-focused training and grooming, and move them around the supply chain alongside implementing regulatory pockets to guide practices and compliance.
INSIGHTS INTO FINANCIAL ISSUES FOR SMEs
Harmful tax competition was warned against and advice on loans and financing in SMEs were provided. Financing needs were split up based on the growth of a SME, divided respectively into the start up period, the growing stage and the expansion stage.
INNOVATIVE PRACTICES IN EMERGING MARKETS
Understanding what the consumer wants is important regardless in an emerging market or developed one. Consumer understanding is extremely vital such that activity is designed around understanding the consumer, taking what they need and transferring into technical requirements for designing products. The proliferation of social media also allows companies to bridge the gap between consumers and themselves for tighter communication and more effective feedback channels.
Text by Michelle Koh
SOUTHEAST ASIA AND LATIN AMERICA: THE NEXT BUSINESS FRONTIERS
Southeast Asia and Latin America - the two fastest-growing emerging markets in the world. As official bilateral regional relations have not yet been established, the Asia-LatAm Connection (ALC) bridges the two regions through business engagement.
Themed “Bridging Emerging Markets”, the SEA-LATAM Conference 2015 serves as a platform for businesses to explore expansion opportunities into both regions. The series of panel discussions and keynote addresses will provide insights catered to small and medium enterprises (SMEs) on economic trends, governmental initiatives, go-to market strategies, and market-specific business solutions.
The highlight of the Conference will be an intersectional perspective of two pertinent trends of 2015: the ASEAN Economic Community and the Pacific Alliance. The Conference will gather representatives from more than 6 Southeast Asian countries and 5 Latin American countries.
The SEA-LATAM Conference is a non-profit, non-commercial endeavour.