14 July 2021

Key insights

Indonesia – The country has recorded over 20,000 new cases per day over consecutive days in the past week. Previously optimistic economic predictions for 2021 are likely to be revised.  Hospital bed occupancy rates are reported to be above 90 percent in Java.The Indonesian Government has implemented a range of restrictions until at least 20 July that will likely impact business responsiveness.

Malaysia – The Government has imposed the country’s third nationwide lockdown. Measures include universally enforced stay-at-home orders, interstate travel bans and school closures. The Government is weighing stricter closures as the public health situation deteriorates. Official economic growth rates are likely to be revised downwards.

Philippines – The Government hopes to achieve herd immunity for the National Capital Region’s 14 million residents by November as vaccinations gather pace. The Philippines had a total of 1.4 million COVID-19 cases at the end of June. Meanwhile, the World Bank has reduced its 2021 GDP growth forecast for the country to 4.7 percent.

Singapore – The Government’s COVID-19 Taskforce has set out a roadmap for living with COVID-19 as an endemic disease. The taskforce now assumes that the disease will continue to exist in communities similar to the flu. The current national priority is the vaccination program. The goal is having two-thirds of the population fully vaccinated by August with additional plans for booster shots and a comprehensive, multi-year vaccination program.

Thailand – The country is recording between 4,000 and 5,000 new COVID-19 cases per day. Critical care is stretched. Mobility restrictions have again been tightened, with restaurants returning to takeaway-only this week. The economy shrank by 2.6 percent in the first quarter of 2021. The Bank of Thailand projects that the Thai economy may not return to pre-COVID-19 levels of output until the first quarter of 2023.

Vietnam – Container shipping rates have surged to record levels. The shipping cost for a 40-foot container from Vietnam to Europe or the United States has hit $13,650 – a new high. According to logistics specialists, COVID-19 movement restrictions have led to longer transportation times and global container shortage. This has resulted in high freight rates.

Market opportunities

Health

Thailand – Demand for immunity-boosting supplements is on the rise. However, the Thai Food and Drug Administration categorises most nutraceutical and vitamin supplement products as ‘drugs’. This means they can only be distributed via registered pharmacies. This limits the capacity for Australian vitamin and supplements companies to take advantage of online channels, and also restricts the sale of such goods via traditional retail.

Infrastructure

Thailand – Multiple infrastructure projects are likely to commence in the next four years, creating opportunities for Australian companies. These include:

  • a high-speed rail network linking Bangkok’s three airports worth $10 billion
  • the Eastern Airport City project at U-Tapao, Rayong, worth $13 billion
  • Phase 3 of the Map Ta Phut deep seaport development worth $2.5 billion.

These projects are located in the special economic zones within the Eastern Economic Corridor, which offer corporate income tax exemptions and reductions. Japan is the top FDI applicant in the corridor ($2.3 billion), followed by China ($920 million).

Agriculture and Food & Beverage

Indonesia – Indonesian supermarkets have observed consumers’ increasing awareness of the risks of high cholesterol and diabetes, and a concurrent rise in interest in healthier foodstuffs. The latter group includes dairy, ‘healthy’ packaged food, and fresh fruit and vegetables.

Malaysia – Australian biotech Stemcell United has partnered with Universiti Malaysia Sabah to develop and commercialise seaweed-derived downstream products. The partnership is responding to the growing vegetarian movement in ASEAN and increasing consumer demand for plant-based food alternatives.

Philippines – Australian agri-food products face increased competition from other foreign producers. Specific opportunities include healthier food options, such as fresh fruits and vegetables, and plant-based products. Opportunities also include premium and imported food items like meat, wine, dairy and baking ingredients. Meanwhile importers say animal feeds continue to be in high demand, particularly by the hog and poultry industries.    

Thailand – As the COVID-19 resurgence gathers pace retailers are leaning towards importing fruit in large quantities with a longer shelf life. Consumers aim to minimise wastage. This will impact demand for Australian summer fruit. Protocols do not permit mixed shipments, and full container orders are typically too large for buyers. 

Vietnam – Buyers are showing interest in using Australian barley as animal feed. In Vietnam, cows and pigs can use a wide variety of feeds. Australian barley is considered a good option as it is cost effective, supports the animal’s health, and leads to desired meat products.

Supply chain, travel & tourism

Philippines – Travellers into the Philippines who are fully vaccinated from ‘green’ countries (still to be announced) or those with low COVID-19 risk are now allowed a shorter, 7-10 quarantine from the current 10-day requirement. Travellers should have ‘exclusively stayed’ in a green country for 14 days prior to arrival in the Philippines.

Thailand – Australian exporters report that decreased container availability and higher sea-freight rates are impacting their business. Booming Chinese exports to the US and Europe have led to a lack of empty containers where they are required. The US has a surplus of empty containers, but ports in the US are congested and turnover is reported to be slow. 

Thailand – Phuket is now open to international tourism. The Phuket ‘Sandbox’ enables visitors to the island so long as they are vaccinated, test negative prior to departure and undertake four further PCR tests during their stay. They must also accept electronic monitoring. Visitors must not leave the island for 14 days.

Technology

ASEAN – New internet users across the region grew by 40 million in 2020, according to the e-Conomy SEA Report by Google, Temasek and Bain & Co. The pandemic has accelerated digital adoption particularly in e-commerce, online media and food delivery. E-commerce has risen 63.2 percent in just one year. The report signals growth opportunities in healthtech, fintech and edtech.

Malaysia– The Prime Minister has emphasised the importance of cybersecurity to economic growth. The National Cyber Security Agency has been tasked with coordinating and setting standards for all cybersecurity initiatives in Malaysia. Austrade has helped Australian cybersecurity companies to engage in the market. This includes conducting business matching sessions with related Malaysian partners.

Finance and fintech

Philippines – COVID-19 has fast-tracked the take-up of digital payments in the Philippines, which is traditionally a cash society. Globe, the country’s leading telco, reported a 150 percent year-on-year increase in registered users for its GCash mobile money service, and an eightfold jump in payments. The Philippine central bank is aiming for half of all payments to be digital by 2023.

Thailand – The Commerce Ministry intends to remove three types of services from ‘List 3’ of the Foreign Business Act: telecommunications, finance and software development. This means businesses in these sectors will not be required to seek permission from the Foreign Business Commission to operate in Thailand.

Vietnam – E-wallets and payment intermediaries have expanded as a result of the pandemic. Last week, BCCard, the largest credit card company in South Korea, acquired Vietnamese point-of-sale terminal distributor Wirecard Vietnam. Major telecommunications firms such as MobiFone, Viettel and VNPT have introduced e-wallets and expanding related services.

Ed-tech

Malaysia The government is encouraging institutions to adjust their existing learning modules and assessment methods to suit the digital environment and increase the capacity of teaching staff. Australian distance learning expertise is well-positioned to help train and support Malaysian teaching staff members who are given education-digitalisation objectives.

Malaysia – The Ministry of Higher Education has outlined several areas of strategic focus for 2021, including Empowering the Education Digitalisation Agenda, Enhancing Strategic Collaboration Network, Strengthening Graduates Marketability, and Driving Community Well-being, Promoting Institutional Excellence. Capacity building of lecturers in teaching online and hybrid models will continue to offer opportunities for Australian universities and trainers.

Vietnam The Ministry of Education and Training has issued new guidance for the delivery of joint qualifications on online platforms. The Ministry’s new guidance offers opportunities for Australian education providers to develop new TNE models with local academic institutions and promote the online education capabilities of Australia’s education sector.

Thailand – The Eastern Economic Corridor (EEC) Office will work with government agencies and the private sector to sharpen the skills of more than 8,500 workers in 2021. The EEC Office estimates that more than 475,000 workers will be needed in the next five years, including people with the skills required by foreign companies. The government is looking at ways to improve skills to better serve targeted industries, particularly in sectors such as next-generation cars, robotics, medical technology and aviation. 

Singapore – Ngee Ann Polytechnic wants new technologies to enable students to design and develop prototypes using 3D printing technologies. The polytechnic seeks a partner to move their program to an online space and allow students to 3D print products virtually. This presents an opportunity for Australian edtech companies to bridge this gap in STEM education.

Manufacturing & defence

Singapore – The biennial naval and maritime industry show IMDEX 21 will only offer a maritime conference and business fora on 27–29 July.  Exhibitions have been cancelled, affecting Team Defence Australia’s plans to set up a stand for Australian defence companies, including Austal. 

Singapore – The Government has announced a ‘qualitative transformation’ of the advanced manufacturing sector in response to the disruption of international supply-chains caused by COVID-19. The program aims to encourage a shift to products where competition is not based on cost but on intellectual property and the quality of products. This shift is intended to grow the manufacturing sector by 50 percent over next decade. It opens up opportunities for Australian companies with capabilities in biomedical electronics and precision engineering.

Energy

Malaysia – The government has set an aspirational 20 percent renewable energy target by 2025. International companies have been keen to be involved. Dell recently announced its largest solar panel installation in Penang.

Contact

ASEAN: Sally.Deane@austrade.gov.au
Manila: Christopher.Lim@austrade.gov.au