ASEAN’s Growth Frontiers and Doors to AEC: Malaysia and Thailand

Emerging Market Growth – Executive Insights

ASEAN’s Growth Frontiers and Doors to AEC:

Malaysia and Thailand

© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of

Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

2

Today’s Presenters

Aroop Zutshi

Global President & Managing

Partner, Frost & Sullivan

Host: Monsinee Keeratikrainon

Country Manager – Thailand

Hazmi Yusof

Vice President, Asia Pacific

3

Today’s Agenda

Speaker Description Timing

Aroop Zutshi Introduction to Emerging Market

Innovation & Economic

Development Innovation

10 minutes

Monsinee Kee Overview: ASEAN

Overview: Thailand and Focus

Industries

15 minutes

Hazmi Yusof Overview: Malaysia and Focus

Industries

15 minutes

Q & A 5 minutes

4

Aroop Zutshi

Global President & Managing

Partner

Overview on Emerging Market Innovation & Economic Development

Innovation

Functional Expertise:

20+ years of growth management expertise working with companies to design

growth strategies for their existing portfolio of product/offerings, and facilitating the

development of market entry strategies especially in emerging markets.

Particular expertise and close association with global major companies in:

New product introduction

Geographic Expansion

Outsourcing

5

Game Changer – Emerging Market Innovation (EMI) &

Economic Development Innovation (EDI)

The new goal of the game is about getting the other side to come over and not loose the winning

advantage

Countries are competing among themselves to attract & retain FDI from corporations, utilizing technology

and knowledge capital, while providing supply-chain ecosystem and enabling hard and soft infrastructure.

Source: Frost & Sullivan

6

EMI & EDI – The Value Proposition Framework


7

Join us at GIL, Silicon Valley – Sept 9-12th 2012

WS4. EMI 2012 – The Emerging Markets Innovation Summit 2012 - Sep 12th

9:00am -9:45am

EXECUTIVE BULLETIN

Your Growth Blueprint: Emerging Market Innovation (EMI)

& Economic Development Innovation (EDI) Programs

9:45am -10:15 am

EXECUTIVE BULLETIN AND INTERACTIVE EXERCISE

Achieving a Powerful and Sustainable Country Pipeline

10:15am -11:00 am

INTERACTIVE EXERCISE & WORKSHOP

Using the Tool Kit & Developing a Systematic Approach to Emerging Markets

11:00am -11:15 am

Networking and Refreshment Break

11:15am -12:15 pm

INTERACTIVE

Ask the Global Experts – Growth Perspectives (from both sides of the field)

12:15pm -12:30 pm

CONCLUSIONS

The Emerging Markets Innovation Summit -Concluding Remarks

8

Corporations and Governments: The Rules of

Engagement Just Changed

FDI Inflows, Select Emerging and Developed Markets, 2000-2011

Thailand

• Emerging hub for production of auto parts and automotives

Korea

• Seeking to be East Asia’s financial hub

Malaysia

• Knowledge hub for energy, resources and technology

Chile

• Counter-magnet to Silicon Valley

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

2,000.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FD

I In

flo

ws

($

Bil

lio

n)

Total FDI in Emerging Markets ($ Billion) Total FDI in Developed Markets ($ Billion)

Sources: OECD, UNCTAD and Frost & Sullivan

Share of Developed Markets in

Global FDI: 49.9%

Share of Emerging Markets in

Global FDI: 32.2%

Share of Developed Markets in

Global FDI: 63.3%

Share of Emerging Markets in

Global FDI: 16.9%

Note: Emerging markets considered are based on Frost &Sullivan’s Emerging Market Index

ASEAN’s Share of Global FDI

Inflows increased from 4.4 %

in 2006 to 7.6 % in 2011.

9

14.9 23.9 22.3

0.0

50.0

100.0

150.0

2008 2009 2010

Co

mp

os

itio

n o

f F

DI b

y I

nve

sto

r (%

)

ASEAN USA

Japan European Union (EU)

China Republic of Korea

Australia India

ASEAN in the Sweet Spot of Economic Growth- Attracting

FDI, Surging Middle Class and High Investor Confidence

“…the timing was good since the EU was keen to increase trade

and investment cooperation in Asia and the FTA could help clear

existing trade barriers”-Srirat Rastapana, director-general of Trade

Negotiations Department

Note: ASEAN FDI refers to inter ASEAN regional inflows. Sources: Bangkok Post , ASEAN and Frost & Sullivan

Top 10 Investors , ASEAN, 2008-2010

$47.08 billion

$76.20 billion

Sharp recovery since 2009, ASEAN FDI inflows increased from

$37.9 billion in 2009 to $76.20 billion in 2010

The Rise and Impact of the ASEAN Economic Community

(AEC) by 2015

Automotive Sector: 80 cars

per 1000 inhabitants

Market size of 1 Billion

New growth economies:

Indonesia & Vietnam

Human Capital Challenges &

Opportunities The Asian Middle Class

Access To Key

Emerging Markets

AEC 2015

Emerging Trends, AEC, 2012-2015

Sources: ASEAN and Frost & Sullivan

http://ideacouture.com/blog/wp-content/uploads/2009/11/grameen-bank-meeting.jpg

11

Emerging Market Growth – Executive Insights: Save the Date!

Region Spotlight Countries Live Date of Session

Latin America Colombia & Mexico March 27th

Asia Pacific Sri Lanka June 20th

Asia Pacific Thailand & Malaysia July 19th

Central and Eastern Europe Turkey & Ukraine September 25th

Middle East and Africa Egypt & Nigeria November 15th

Briefing completed

12

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Access content on www.frost.com

Contact regional AE for more

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13

Frost & Sullivan’s Regional Expert Commentary: Thailand

Functional Expertise:

• 12 years of experience in business strategy and management consulting across technology

sectors in Thailand while helping large organizations develop business strategies, pertaining to:

• Strategic planning (business & technology)

• New product & service R&D

• Competitive analysis and market expansion

• Business process transformation

• More than 10 years experience in class room teaching and corporate trainings & workshops

Particular expertise:

• Telecom sector (service providers) and ICT solution providers

• Banking & Financial services

• Service and Manufacturing industries

Monsinee Keeratikrainon

Country Manager – Thailand

14

ASEAN and AEC (Association of South-East Asian Nations and

ASEAN Economic Community)

ASEAN Integration: The Growth Frontier

Source: International Monetary Fund, World Economic Outlook Database, April 2012 & CIA-The

World Factbook

GDP (PPP) per capita, ASEAN-5* GDP, 2002 - 2011

*Composed of 5 countries: Indonesia, Malaysia,

Philippines, Thailand, and Vietnam.

3,000

3,500

4,000

4,500

5,000

5,500

6,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Curr

en

t In

tern

atio

nal D

olla

r ($

) • 10 Countries

• 600 Million Population

• GDP: US$1.800 Trillion

• World’s 9th Largest Economy

• Market Capitalization of Listed Companies $2.000

Trillion

• Predicted GDP Growth between 5.6% and 6.3% for 2013

The Association of Southeast Asian

Nations (ASEAN)

was established on 8 August,1967,

consisting of 10 countries under the

theme

“One Vision, One Identity, One

Community"

16

ASEAN Economic Community (AEC)

• After the completion of ASEAN Free Trade Area (AFTA), the Bali Concord II

Statement was announced in the 8th ASEAN Summit in 2003, to take AFTA to the

next level, ASEAN Economic Community (AEC)

• Following the success of the European Economic Community. Later in the 13th

ASEAN Summit in 2007 in Singapore, ASEAN leaders adopted the ASEAN

Economic Blueprint to serve as a coherent master plan guiding the

establishment of the ASEAN Economic Community 2015.

AEC is set to be the center of regional

economic integration by 2015, given the

following key characteristics:

• A single market and production base

• A highly competitive economic region

• A region of equitable economic development

• A region fully integrated into the global

economy

Areas of Cooperation, AEC, 2012

Human resources

development

and capacity building

Recognition of professional

qualifications

Closer consultation on

macroeconomic and financial

policies

Trade financing measures

Enhanced infrastructure and

communications connectivity

Development of electronic

transactions through e-

ASEAN

Integrating industries across

region to promote regional

sourcing

Enhancing private sector

involvement for building AEC

AEC will transform ASEAN into a region with

free movement of goods, services,

investment, skilled labor, and freer flow of

capital. Source: aseansec.org

17

Thailand

18

Thailand:

Hub of Greater Mekong Subregions and Gateway to ASEAN

• Strategically located in the connected areas of ASEAN and hub

of Greater Mekong Subregion (GMS)

• Northern border connected via Myanmar to China and India

• Eastern border connected via Lao and Cambodia to

Vietnam

• Southern bordered connected via Malaysia to Singapore

• Total population is 64.0 million of which approximately 9.3

million live in Bangkok and its vicinities. 94.0 percent of the

population are Thai-speaking Buddhists; Thai is also the official

language of the country.

• More than two thirds of GDP is export-dependent. Thailand is

• The world's largest cassava exporter

• The 2nd largest exporter of gypsum

• Leading exporter of rice and a major exporter of shrimp,

• Exporter of high-tech products such as integrated circuits

and parts, electrical appliances, and vehicles.

• According to HSBC’s “Global Research Report – The World in

2050”, Thailand would be the world’s 22nd largest economy in

2050, 3rd largest in South East Asia after Indonesia and Malaysia


19

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

GD

P (

$ B

illi

on

)

Thailand boasts of one of the highest GDP’s in the Region

Source: Tradeeconomics.com , The World Bank Group and Frost & Sullivan

GDP Comparison, South East Asia Select Economies, 2011

GDP ($ Billion), Thailand, 2001-2011

Key Sectors

• Automobiles and automotive parts (11.0%),

• Financial services (9.0%)

• Electric appliances and components (8.0%),

• Tourism (6.0%)

• Cement, auto manufacturing, heavy and light

industries, appliances, computers and parts, furniture,

plastics, textiles and garments, agricultural processing,

beverages, tobacco

1014.00

319.00

104.00

0.00 200.00 400.00 600.00 800.00 1,000.00 1,200.00

South Korea

Indonesia

Thailand

Malaysia

Hong Kong

Singapore

Philippines

Vietnam

GDP ($ Billion)

Indicator (2011) Value

GDP per capita $9,700

GDP Growth 0.1%

Inflation 3.8%

Unemployment 0.7%

GDP Composition (2011)

Agriculture 25.2%

Industries 69.3%

Services 5.5%

Key Economic Indicators, Thailand, 2011

20

Exports and Tourism drive Thailand’s Economy

• Thailand is heavily dependent on

exporting, about two thirds of GDP

• Industrial economic growth in the region

is led by Oil & Gas, Mining &

Commodities, Manufacturing,

(Automotive & Transportation, Chemicals

& Materials & Food, Electronics) and

Services

• In the service sector, tourism is one of the

biggest proportion

• Latest trend is Medical tourism as Thailand is

recognized one of the top-10 medical tourism

destinations due to its internationally accredited

medical facilities and qualified medical

professionals with state-of-the-art technology

and service excellency at much lower cost. Room of Bangkok Hospital in Phuket


Value of Exports, Thailand, 2000-2010

Ex

po

rts

($

Mil

lio

n)

21

Thailand has one of the Strongest and Highest-growth

Capital Market in the Region

Index Performance, Select Countries, 2010-2011

Source: Stock Exchange of Thailand

and Frost & Sullivan

Thai market’s dividend yield

of 3.73 percent at the end of

Q1, 2012 making it Asia’s

second-highest dividend yield

Note: Data as at end December 2011

Regardless of the political turmoil and

floods, the capital market keeps

growing at fast pace since 2007

• Average 16.0 per cent profit growth

since 2009

• Annual 17.0 percent growth of

dividend payment since 2008

Thai Listed Companies

22

• Thailand aims to be the logistics hub of ASEAN, thus working closely with

Myanmar government on Dawei Development projects, aiming to connect

Thailand, Myanmar, China, and India through integrated infrastructure.

Large Investments in Hard Infrastructure will Augment

Growth

• Floods in 2011 caused physical and economic damages up to $30.00 billion. The

country had a slowdown in Q4, 2011 and started to pick up in late Q1, 2012.

• Several TORs related to water and floods management will be released by Q3 for

both local and MNCs firms.

Water Management and

Floods Prevention

$10.00 billion

Infrastructure to connect

Thailand and Myanmar

under Dawei Development

$3.00 billion

• Airport Authority of Thailand (AOT) has finalized the expansion plan of

Suwannabhum airport (Phase 2) in May 2012 due to its peak capacity.

• 51.0 million people is expected to travel this year while capacity is 45 million.

Airport Expansion

and ASEAN integrated

aviation

$2.00 billion

3G, IDC and Cloud

Infrastructure

$1.00 billion

Renewable Energy

$0.50 billion

• Government injected $100.0 million for funding renewable energy while private

companies started to explore invest in special plants, i.e. solar cell plant,

biogas plant.

•

• 3G licensing is underway (Q3, 2012). Three major operators are expected to

roll out 3G nationwide within 2012-2013.

• All key IDC players are upgrading their capacity due to high growth & demand

from companies recovered from floods and those who want to prevent


23

BMA as the Focal Point for Development of Soft

Infrastructure

• Government strongly realized the needs to

improve human capital to be ready for

AEC, thereby the budget for fiscal year

2013 is allocated to Ministry of Education

at the highest proportion than other

Ministries ($1.50 billion)

• This year there was some initiative already

begun, buying tablets for rural students

(using $300.0 million budget)

• Urbanization is getting higher in all 3

regions. Most rural development projects

are related to Industrial (e.g. Industrial

Zones/ Estates)

• Soft infrastructure e.g. financial system and

healthcare system in Bangkok Metropolitan

area is one of the most advanced in region

Bangkok Metropolitan Area (BMA), Thailand, 2011

6 Provinces surrounding BMA with almost

14.0 Million population

(Out of total 77 provinces / 64.0 Million population)

Bangkok

Samutprakan

Patumthani

Samutsakorn

Nonthaburi Nakornpatom


24

Thailand’s Megatrend Vision: Empowered, Urban, Trade

Promoting, Well-Developed

• Almost 22.0 percent of population lives

in Bangkok Metropolitan and Nearby

Areas (consisting 6 provinces)

• A few big cities representing each

region, i.e.

• North Region – Chiang Mai,

Chiang Rai

• Northeastern –

Nakornrachasima, Ubonrachatani

• Eastern – Chonburi, Pattaya

• Southern – Nakornsrithammarat,

Hadyai, Phuket

• Thailand is amongst the top-3 countries in the

world with highest proportion of Female top

executives

• Around 40.0 percent of top management positions

in Thailand are held by women (compared to

average of 20.0 per cent globally)

• More female population in universities than male

• >50.0 per cent of female population have higher

graduated degrees

• AFTA (ASEAN Free Trade Areas) – 10

ASEAN countries

• ASEAN-China Free Trade Zone

• ASEAN Economic Community (AEC) to

be enacted in 2015

AEC is more than just free-trade areas but

integration of economic activities in the

region including investment – free flow of

capital and manpower, harmonization of

regulations

• New hard infrastructures are

underway

• More needs for imported know-hows

and foreign capitals

• Not only in BMA but also major cities

and areas connected to neighboring

countries


25

Investor friendly Thailand sees a Surge of FDI Inflows

Source: Thailand Board of Investment and Frost &Sullivan

• More than 60.0 per cent of FDI is from Japan

• More than 60.0 percent of FDI are export-

focused manufacturing

• The top area of FDI is Electronic and

Electric as Thailand is the #1 hard-disk

producer of the world, dominated by

Western Digital and few other leading brands

FDI Applications and Combined FDI Value, Thailand,

2011 and 2012

26

Focus Industries

Healthcare

Chemicals and

Materials

Automotive

27

Thailand: High-Growth Sectors

Thailand is ASEAN’s

- Largest market for light commercial

vehicles (LMC)

- Largest exporter of tires

- Largest importer of Steel

Automotive

- Thailand, Singapore, and India are the top

destinations for medical tourism in Asia

(Source: Center for Medical Tourism

Research)

- Leading hospitals in Bangkok have at least

1/3 of expatriate patients Healthcare

- Largest local conglomerates like PTT and

SCG are strongly dominating this market.

Both are the Thai’s top-5 listed companies

- Both companies are investing in global

chemicals/biochem businesses and

research labs

Chemicals/

Materials

Toyota, Nissan, Isuzu, and

Honda all have long

established manufacturing

facilities in Thailand and

becoming hub of regional

and global exports

Bangkok General Hospital

and Bamrungrad Hospital are

the top 2 players with best-in-

class technology while

providing services like 5-star

hotels

PTT Chemical have vertically

expanded globally, esp. in

bio-chem, recently partnered

with a U.S. lab, Myriant

Technologies, to research &

develop green chemicals

Industry Snapshot Key Players

28

Malaysia

Functional Expertise

• Hazmi is the Vice President for Frost and Sullivan Asia Pacific with the portfolio of covering Malaysia Business and operation. He has been in the

business advisory and consultation industry since 2001.

• He also has the experience being on the client side, a government linked company (GLC) being part of the successful business transformation .

• His expertise lies in business and market intelligence and business transformation strategies. He sits in numerous project steering committees for

projects in the Asia Pacific region

Industry Expertise / Projects Undertaken

• Project steering committee member on a feasibility study on establishing a port in Malaysia. The feasibility on location, construction and operation of

the port and potential trade volumes and routes. The stakeholders included government ministries, state government and agencies.

• Project quality control supervisory team member for a manufacturing technology roadmap specifically for the electrical and electronic sector. The

roadmap entails developing a blueprint ,implementation strategies and financial assessment. The stakeholders included multinational companies, state

governments and agencies.

• Project team member of a baseline study for business and technology transformation blueprint for a Port Authority in the Middle East. The scope

covers international benchmarking with other ports, technology roadmap macro business process engineering and human capitol development

strategy.

• Project team member on a human capital supply demand study for the ICT Industry as part of the K workers Development Initiatives. The scope

covers corporate demographics, gaps in manpower supply and demand and overall manpower needs and Human Resource metrics for the next five

years.

Hazmi Yusof Vice President, Asia Pacific

Frost & Sullivan

Asia Pacific

Kuala Lumpur

Malaysia

Frost & Sullivan’s Regional Expert Commentary: Malaysia

29

30

Malaysia gains Visibility in Global Economy

Source: Reuters, Bloomberg and Frost & Sullivan

• Malaysia Tops the Asia IPO Market

for 2012

• Going Forward with Public-Private

Sector Partnership through its

National Transformation Program

31

Driven by Services, Malaysia is on a Growth

Trajectory

Source: ETP Annual Report 2011 and Frost & Sullivan

Key Indicators, Malaysia, 2010

Indicator (2010) Value

GDP ($ Billion) 238.00

GDP per capita $8,423

GDP (PPP), share of world

total

0.6%

Population 27.9 million

Growth is driven by consumption and investment

Sector Share (%)

Agriculture 7.3

Mining 7.0

Construction 27.6

Services 57.7

Composition of GDP, Malaysia, 2010

53.2

13.4

11.0

10.9 9.4

2.1

Private Consumption Public Consumption

Private Investment Public Investment

Net Trade Inventory

Demand-side Composition of GDP, Malaysia, 2010

Note: All values are in percent

32

Soft Infrastructure: Global Rankings are Evidence

of Malaysia’s Investment Attractiveness

Sources: World Economic Forum’s Global Competitiveness Report 2011, A.T. Kearney and Frost & Sullivan

FDI Confidence Indicators, Select Countries in APAC, 2010 and 2012

0

5

10

15

20

25

30

China India Singapore Indonesia Malaysia Vietnam Thailand Taiwan

FD

I C

on

fid

en

ce

In

dic

ato

r (R

an

k)

2010 2012

Rank moved up

Rank moved down

Ease of Doing Business, Select Countries in APAC, 2012 Global Competitiveness Index, Malaysia, 2009,

2010 and 2011

18

91

0 20 40 60 80 100

Hong Kong SAR, China

Korea Republic

Thailand

Malaysia

Japan

Taiwan,China

China

Regional Average (East Asia&Pacific)

Rank (out of 183 Countries)

Year Rank Trend

2009 24

2010 26

2011 21

33

Vision 2020 set to Propel Malaysia’s Economic

Development

High-Income

Target USD 15,000 GNI per capita by 2020

Sustainability

Meets present needs without compromising

future generations

Inclusiveness

Enables all communities to benefit from the wealth of the country

Quality of Life

Source: New Economic Model for Malaysia, 2010, Pemandu and Frost &

Sullivan

Objectives of Economic Transformation

Program, Malaysia, 2010 Onwards

Gross National

Income (GNI)

• Target $15,000 per capita

• USD523 billion GNI

• 6% GDP growth per annum

People/Jobs

• 31.6 million

population

• 3.3 million

additional jobs

Transformational

Actions

• 12 NKEAs

• 131 EPPs

• 60 BOs

• Transformational

approach

• Private sector led

Investment

• $444.00 billion investment

• 92% private investment

• 8% public investment

• 73% domestic direct investment

• 27% foreign direct investment

Targets for 2020

ETP Targets for Economic Development, Malaysia,

2020

34

Growth Drivers For Economic Transformation

National Key

Ecominc Areas

(NKEAs)

Tourism

Education

Agriculture

Communications Content and

Infrastructure (CCI)

Palm Oil

Healthcare

Wholesale and Retail

Electronics and Electrical (E&E)

Oil, Gas and Energy

Business Services

Greater Kuala Lumpur/Klang

Valley

Financial Services

Source: ETP, 2010 and Frost & Sullivan

12 Key Economic Areas (11 Industry Sectors + Greater Kuala Lumpur)

To kick start the

Economic

Transformation

Program.

Based on 10

year project that

targets high

income.

Private Sector

drives high

impact projects,

government

support through

policies and

incentives.

Target is high

income nation

by 2020

National Key Economic Areas, Malaysia, 2012

35

Focus Industries

• Oleochemical derivative products

• Food & health-based downstream

segments

• Bio fuels Palm Oil

• Health metropolis

• Health travel

• Develop medical hub

Healthcare Services

Tangible

based,

commodity

type export

Non-tangible

based,

services

related export

36

Urbanisation

Sustainable Source For Consumers

New Applications Demographics

Renewable Energy

Megatrends Impacting Opportunities in Palm Oil

• Bio Fuel to counter the rise of Crude Oil prices and its forecasted shortages

• Sustainable alternative fuel

• Byproduct converted to Biomass

• World urbanisation driving strong and increasing demand for energy and primary commodity such as food

• The forecast average world urbanisation rate in 2050 is 68.7 percentage points, an increase of approximately 18.2% from 2010.

• Food and non food applications

• Food: cooking oil, margarine, bakery shortening, confectionary fats

• Non food: soap, detergent, toiletries, cosmetics.

• Growth in world population and higher population growth rates in developing countries.

• Growth is close to source: crops are located in the region of developing countries i.e., Asia, Africa and South America.

• New applications: polyols for making polyurethane

• ‘Polyurethane’ is broadly use in manufacturing and consumer goods.

Source: Frost& Sullivan

37

Palm Oil : A Key Industry for the Malaysian

Economy

Forecast of Supply, Demand and Annual Average Local Delivered for CPO, Global, 2010-2015

4th largest contributor to

the economy at

US$17.00 Billion in 2011. In 2020 to be

US$58.00

Billion

providing

employment

for 41,000

people

• The global palm oil demand is forecast to grow at a CAGR of 4.8 percent

• Projected growth of palm oil and palm oil related products is driven by multiple factors which includes

growing demand for food due to growing population, economic development in Asia Pacific including

East and Central Asia and Latin America.

2nd largest exporter in

the world exporting to

150 countries

Sources: OIL WORLD, World Bank and Frost & Sullivan

38

Felda Global Ventures: A Global integrated and

diversified agri-business multinational

Company Profile World’s 2nd Biggest IPO in 2012

FGV is a global diversified agribusiness oil palm plantation operator

which is also involved in the downstream processing and refining.

FGV is the world’s 3rd largest oil palm operator.

Its agricultural and agri-commodities operations spans across 10

markets, including Indonesia, China, India, North America, South

Africa and Turkey.

Development Plans

FGV Growth Strategy 2010- 2015 Growth Initiatives in 2012-2015:

Expand Downstream

Capabilities

Land bank

acquisition and

expansion

Intensify Research

& Development

Expanding in Africa for Palm Oil, rubber in

Myanmar, Cambodia and sugar in Indonesia,

Myanmar and Cambodia

Expanding downstream market in China,

India, Myanmar.

Possible partnership with Louis Drefus Group

Initial Public Offering raised US$3.2 Billion

Out perform world biggest IPO in Facebook.

Price on listing at RM5.39 – 21% above retail

and 18.5% above institutional price.

12 cornerstone investors secured,

oversubscribed by 6.75 times.

Sources: FGV and Frost & Sullivan

39

Focus Industries

Palm Oil

Healthcare Services

40

Demographics

Economics

Globalization Convergence

Safety & Outcomes

Megatrends Impacting Opportunities in Healthcare

• Reducing medical errors and misdiagnoses

• Reducing inefficiencies and unnecessary, wasted care

• Reducing infant mortality

• Fighting chronic conditions (heart disease, diabetes, congestive heart failure, asthma, depression, arthritis, etc.)

• Treating underserved populations and addressing inequalities in health outcomes

• Incentivizing patients to adopt healthy behaviors, including children

• Greater transparency and accountability of outcomes and costs by healthcare providers

• Reigning in drug costs

• Greater bundling of charges for healthcare services and tying payment to outcomes

• Expansion of retail medical clinics

• Digitization of healthcare information management and interactions between patients and providers

• Improving primary care and collaboration across all healthcare providers, i.e. “medical home”, hospitalists, etc.

• World patients, SEA as World’s hospital

• Asian companies emerging

• Partnerships between Asian and Western companies

Sources: Frost & Sullivan

41

Innovation to drive the Ability to ‘serve more with less’ with

Rapid Population Growth and Aged Population Growth

Japan

• 127 Million population

• 1.8 Million hospital beds

• 9.9 beds/1000 people

• 2.7 doctors/1000 people

• 7,785 hospitals

Australia

• 27 million population

• 213,000 hospital beds

• 7.9 hospital beds / 1000 people


• 1,317 hospitals

South Korea

• 48 Million population


• 5.5 hospitals beds/1000 people


• 997 Hospital

Singapore

• 5.08 Million population


• 2.04 beds per 1000 of the population

• 1.7 doctors /1000 people

• 23 hospitals


Malaysia

• 28.3 million population


• 1.62 hospital beds / 1000 people


• 347 hospitals

Thailand

• 66.3 Million population


• 2.13 beds per 1000 of the

population

• 0.37 doctors /1000 people

• 1,334 hospitals

China

• 1,300 Million population

• 3 Million hospital beds

• 2.2 beds/1000 people


• 60,396 hospitals

India

• 1,100 Million population

• 0.8 Million hospital beds

• 0.7 hospital beds/1000 people


• 13,896 hospital

Demographic Indicators, Global, 2010

42

Healthcare Expenditure & Funding

• Malaysia spent an estimated of 4.4

percent of GDP on healthcare in 2011

• The allocation per capita in 2010 was

USD 366, which is the second highest

in ASEAN region

• At present government expenditure,

constitute 56.4 percent of total

expenditure with the balance being

covered by healthcare insurance, out-

of-pocket spending and private sector


0.0

5.0

10.0

15.0

20.0

2007 2008 2009 2010 2011 2012 2013 2014 2015

He

alt

hca

re E

xp

en

dit

ure

(%

of

GD

P)

Japan Indonesia Malaysia Singapore

Thailand UK USA

Healthcare Expenditure, Select Countries, 2007-2015

Trends in HC Expenditure, Malaysia, 2000-2010

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

So

urc

e-w

ise H

C E

xp

en

dit

ure

(%

of

To

tal

HC

Ex

pe

nd

itu

re)

Government Expenditure on Health (% of Total HC Expenditure)

Private Expenditure on Health (% of Total HC Expenditure)

Out of Pocket Expenditure (% of Total HC Expenditure)

43

IHH Healthcare: Global Healthcare Services

Provider

World 3rd largest IPO in 2012

Initial Public Offering raised US$2 Billion

Largest dual listing in two ASEAN stock exchanges in Malaysia and

Singapore.

IHH's market capitalization is $7.3 Billion), is the second largest listed

healthcare provider after HCA Holdings in New York.

22 cornerstone investors secured including Government of Singapore &

Kuwait, Temasek, Mitsui, Usaha Tegas, World Bank, insurance &

pension funds, private equity.

Company Profile

Premium brand healthcare services from primary

healthcare clinics, to secondary to tertiary hospitals, and

post operative rehabilitation centre.

Operates in Malaysia, Singapore, Turkey, India, China

and investments in Hong Kong, Brunei, Vietnam and

Macedonia.

Mitsui Group, Mitsui & Co., Ltd of Japan is one of the

majority shareholder.

Competitive Advantage Business model

Wide range of

services within the

mid to higher end

target market

Presence in

significant high

growth markets

Key presence

in markets that

are hubs for

medical travel.


44

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For Additional Information

Donna Jeremiah

Corporate Communications

Asia Pacific

+61 (0) 8247 8927

[email protected]

Carrie Low


Asia Pacific

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[email protected]

Sasikarn Watthanachan


Thailand

+66 2 637 7414

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