Transcript: Trade Opportunities in the Asian Century - Mining and Energy in ASEAN
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>>Sean Riley: I have, I think, quite a big task over the next - I've got about 15, 20 minutes I gather to really talk to you about ASEAN. It's a big place, so I've decided to attack the task by having a bit of a tour around ASEAN over the next 15 markets, and I will feature three markets. As I said this is really about raising your awareness. So I'll feature three markets in each of the two halves of this presentation around energy and resources and around mining. There are three things I want to talk about in each of those tours; they will be really a bit of a snapshot of what's happening in each of the markets, the nature of each of the markets. The second thing I'll talk about is where we see the high end opportunities, and then thirdly, very quickly what we think you can do about it.
Before I do that, it's always just very interesting for me to know, Vietnam will feature in both of those halves of the presentation around energy and around mining, so I'm going to just ask now, who's been to Vietnam? Hands up if you've been to Vietnam. Thank you, and you'll be able to go very conveniently soon when Vietnam Airlines starts direct flights to Brisbane from Ho Chi Minh. Who's been there on business? A few less, okay.
When I looked at the information that we collated from our offices around the region, I guess the theme or the message I've got here, is it is quite a diverse region, so I think something for everyone is the message that distilled itself for me. There's something for everyone in the region in ASEAN.
This slide really just attempts to underline what Cheryl said, really what that says to me is a lot of people - more than some people realise - a lot of people doing a lot of things in a way that most economists think is sustainable for a while, moving to the cities to do those things, getting more income, and finding pleasure in energy consuming pastimes. So, all of that means that what we're seeing around ASEAN is changing energy dynamics.
The first market I guess I'll give you a quick snapshot over, in terms of the first part of the tour, is I guess oil and gas, the energy side of the equation. Three markets; I'll look at one that's a bit established, one that's a bit growth and one that's emerging in the region. Singapore most of you are probably familiar with. They're certainly the most advanced economy in the region, the biggest petrochemical processing plant in the region, oil and gas processing, which has really led to some downstream industry around oil rig construction, and the fact that a lot of global players are there, meaning in Singapore there's a lot of opportunity for global supply chain access.
Vietnam, where I'm from, more of a growth market I would describe it as. My career has been very interesting going from Singapore to Bangkok to Vietnam. Certainly less developed than the other countries around the region in many cases. Really more about frontier gas exploration and production. You've got an economy that's led fairly heavily by exports - 70%. A lot of that comes from their energy exports, but like other countries in the region, they're turning to become a major buyer of energy as they urbanise and their advance in manufacturing and industrialisation outstrips their capacity to produce energy domestically. They need to improve their domestic production and they need to import energy as well. So there's a bit of an emerging LNG industry in Vietnam centred around Vuntau which is to the south of Ho Chi Minh city. Most people say an hour, I've done it in two. And out of that area, a lot of developing of downstream processing and investments being made in that sector as well.
Myanmar, I thought I'd just put up here at the other end of the scale from Singapore. So a very emerging market in the area of energy for us. Natural gas is the country's largest export, and energy - the development of energy - is the largest driver of foreign direct investment into Myanmar. This morning we were giving a talk about something totally different; vocational education and training opportunities around the region, and a lot of people were interested in Myanmar. Certainly when I arrived in Vietnam last year, it was interesting in my first week or two when I was meeting a lot of people that even in Vietnam, Myanmar was just the buzz. At that time we had a person in there on a short term assignment working out what we might do if we open an office in Myanmar, the government's announced that we will be opening an office in Myanmar very soon and there's bound to be a lot of activity, a lot of focus on the energy sector.
Just to recap those three countries, I'll just whiz around again and talk about because of the nature of the market, what we see the opportunities being in those markets. Singapore obviously, equipment, technology and service is inter-global supply chains mainly in the oil and gas sector.
On that, I would also note the presence in the room of another former colleague, in fact Cheryl's predecessor in Singapore, Janelle Casey at the back of the room who at the moment is our manager in Australia of resources infrastructure Janelle? Yep. So Janelle in her time in Singapore focused very heavily on this sector. So you've got a great resource here in Queensland in that area.
In Vietnam we principally see the opportunities around LNG and gas infrastructure, so I think the first - there's a bit of a deal going on here with Queensland and the port ready to receive LNG is due to be ready by 2017, and we think a lot of work in this sector is not directly in this sector, but in building the infrastructure that supports the sector and in Myanmar as you'd expect mainly in gas exploration and production.
So if I conclude that part of the tour around the region in energy, I might now flick to mining and focus on three major mining markets in the region. The first is Indonesia, and I suspect if you're in the mining sector it will come as no great surprise to you to know that Indonesia is probably our largest METS market due to the sheer size and scale of the production in Indonesia. It's projected to grow in the future and it's just the largest market that we supply into from Australia. If you've done work in Indonesia, then I would suggest that a lot of the factors of the markets are very similar and we'll probably talk about that more in the discussion panel, but if you're worked in Indonesia as probably a few of you in this room have, you probably have developed some of the skill base to move into perhaps somewhere like Vietnam, somewhere like Myanmar, where the systems might be a little bit less developed, but you hopefully would have the skills to cope with that.
The second market as I said I'll feature, is Vietnam. Rich mineral reserves, which are pretty much largely untapped, consistent with other countries in the region, lots of sensitivities around foreigners coming in and digging up our product. The sector is pretty much dominated by SOEs - State Owned Enterprises - as much of Vietnam is, but this sector in particular. There's been very little foreign investment in the sector, it's been pretty much local. As I said a lot of cultural and environmental sensitivities, because most of the reserves are in the north and in the centre of the country. The southern part of the country, very much about agricultural production.
The final of the three major mining markets the Philippines, third largest mineral deposits in the world. Still largely untapped. Had a long history of indecisiveness maybe, issues with mining law and mining regulation, how foreign companies can operate. Again, something which is I guess something which is familiar to people like you who work in this sector. Governments have very strong views about what people can and can't do.
So to whiz around again looking at the opportunities, Indonesia probably the broadest range of opportunities. So we think they're in all of those things I've got listed on the screen. The human capital development is an interesting one. As I said this morning, Michael and I have both come from talking to your colleagues in the vocational education and training sector and we're going to be doing a lot more work trying to not just tap into the sale of goods and services in the industries in which we work, but in trying to bring through Australian qualifications and training into all of these sectors as well.
In Vietnam we think the opportunities are in coal supply. That's all a bit hampered by the fact that Vietnam has no deep sea port facilities able to receive Panamax style vessels. That's actually a lie it does, but it's an agribusiness designated port, so the company that owns it isn't going to let minerals and coal and things come into the country through that port. We think the opportunities are in consulting and engineering in underground mining, and also in water management and the environmental side of things.
Finally, for the Philippines, mine expansion, equipment, consultancy and service and maintenance would be the broad areas where we would see opportunity in those countries. I haven't spoken about the others because there's nothing happening. It was just a point of having to focus on something to I guess get the discussion started a bit later this afternoon around - I think the key message being something for everyone. We talk about ASEAN, Cheryl said we talk about Asia, all different countries all at different stages of development and all needing different types of products and services to help them progress in the industries that they are pursuing or where they've got some natural endowment.
The final point that I would make before I hand over to Michael, was to talk about how you might access some of those opportunities. I guess we will talk probably about some of the general characteristics of the markets in the panel session after we've heard from a couple of people who've been there and done that. I say again that a lot of the skills that you might develop in one market in the region possibly equip you, if you learn from them to move into other markets, or if you have that experience, and potentially a lot of the customers that you might be working for are active all around the region. So in some cases, you've got natural referral type strategies to move from market to market.
But perhaps the big point of this slide is, I understand we have out the front a calendar of global events in the mining energy sector. I've got two up on the board that are coming up very, very soon in Indonesia and Vietnam. Indonesia is the big one for us. I think we have 70 companies participating in Indonesia in AusMine, and so far we've got eight of those companies who have decided Vietnam's worth poking around in, having a bit of a look at, before they go to Jakarta. So we've timed those things so that those people can come and have a look at what's happening in Vietnam before they head off to Jakarta. But I saw most people picking them up on the way in, there's a calendar of our global events in this sector over the next 12 months or so.
So on that, I might hand back to Cheryl, thank you.
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