ASEAN Economic Community 2015: Malaysian Perspective

Fi Asia Conference Fi Asia Conference 20112011

2121stst Sept 2011Sept 2011Bangkok ThailandBangkok Thailand

Industry PerspectivesAEC 2015-Impact to the Food Industry

ByMr Kamalbahrin Hj Khamsan

President

Malaysia Food Processing and Packaging Entrepreneurs Association (MAFPA)

Fi Asia Conference 2011Fi Asia Conference 201121st Sept 201121st Sept 2011Bangkok ThailandBangkok Thailand

Introduction

The Association of Southeast Asian Nations (Asean) have a great potential for food market (supply and demand)Malaysia is a relatively small nation with multi

ethnic population of 28.5 million people Malaysia have a niched in halal food ingredient

producer and manufacturerMalaysian government is encouraging world halal

food manufacturer especially Fi to takes advantage of USD 2.1 trillion potential market through Malaysia.AEC 2015 will open more opportunities in Fi

market with a strategic planning and comprehensive management


Background of ASEAN

area of 4.46 million km,3% of the total land area of Earth,population of 600 million people( 8.8% of the

world population.) combined nominal GDP about US$1.8 trillion.as a single entity, it rank as 9th largest economy

in the world.

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ASEAN Six Majors Economy(GDP)2010

Indonesia USD 695 billions (1,027 billions)

IndonesiaThailand

USD 708 billions (1.029 trillion)USD 312 billions (584 billions)

Malaysia USD 218 billions (412 billions)

Singapore USD 217 billions (291 billions)

Philippines USD 189 billions (350 billions)

Vietnam USD 101 billions (275 billions)

Note GDP Nominal(GDP PPP)



MAFPA Background

Represent Malaysia Food Processing & Packaging IndustryMembers in Food Manufacturing, Supplies

/Services and TradeCurrent programmes and activities focus on

export Fully support by industry and governmentFi Asia good platform for promote development of

Malaysia food ingredient industry



Scope of Presentation

AEC 2015-Impact to the Food IndustryRegulation;source of raw material;labor & technology;governments policy and plan;market opportunities & challenges



ASEAN ECONOMIC COMMUNITY 2015emphasised regional cooperation in security,

sociocultural and economic integration.

From CEPT to AECA Common Effective Preferential Tariff (CEPT)

scheme to promote the free flow of goods within ASEAN lead the ASEAN Free Trade Area (AFTA).



http://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area

The Next Step Is ASEAN Economic Community (AEC)

main objectives are:single market and production basehighly competitive economic regionregion of equitable economic developmentregion fully integrated into the global economy



AEC Areas of Cooperation

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;ntegrating industries across the region to promote regional

sourcing; and enhancing private sector involvement for the building of

the AEC.

In short, the AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labour, and free flow of capital.



ASEAN Economic Performance

both export and domestic demand fuelled growth to expand by 7.5 % in 2010Intra-ASEAN trade and investment flows have

shown an upward momentum and are likely to support its 2011 domestic growth, which is estimated between 5.7 and 6.4 %.

NOTE:Reported by The Deputy Secretary-General of ASEAN H.E. Mr. S. Pushpanathan for ASEAN Economic Community (DSG)



ASEAN Foreign Direct Investment (FDI)

FDI into ASEAN reached US$ 75.8 billion last year, doubling the 2009 level, and surpassing the pre-global crisis peak in 2007 of US$ 75.7 billion.FDI flows in ASEAN over the last ten years have

grown at an annual average rate of 19%.



Malaysias Trade With Asean Countries (USD)Billion

2005 2006 2007 2008Total Export 46.5 51.0 51.6 57.1

Import 36.8 43.8 42.7 42.1Net 9.7 7.2 8.9 15.0

Indonesia Export 4.1 5.0 5.9 6.9Import 6.2 6.0 7.1 8.1Net (2.1) (1.0) (2.2) (1.2)

Thailand Export 9.6 10.4 10.0 10.6Import 7.6 9.4 9.0 9.8Net 2.0 1.0 1.0 0.8

Source:Department of Statistic



Malaysias Trade With Asean Countries (USD)Billion

2005 2006 2007 2008Singapore Export 27.9 30.1 29.6 32.6

Import 16.9 18.6 19.3 19.1Net 11.9 11.5 10.3 13.5

Philippines Export 2.5 2.7 2.9 3.3Import 4.1 3.5 3.2 2.3Net (1.6) (0.8) (1.3) 1.0

Others Export 2.4 2.8 2.0 3.7Import 2.0 6.3 4.1 2.8Net 2.4 (3.5) (1.0) 0.9

Source: Department of Statistic

Fi Asia Conference 2011Fi Asia Conference 201121st Sept 201121st Sept 2011Bangkok ThailandBangkok Thailand


AEC 2015-Impact to the Food Industry Regulation

import dutiesHarmonisation of quality and standardsassurance of food safety,standardisation of trade certification



AEC 2015-Impact to the Food Industry In Sourcing of Raw Material

free movement of raw material.reduce trade barrier.reduce cost of doing business through tax

exemptionInter complimentary Increased profit



AEC 2015-Impact to the Food Industry In Sourcing of Raw Material

free movement of raw material.Malaysia import raw material for food industry from Indonesia

(vegetable), Thailand (aquaculture, rice and fruit) and Vietnam (rice)Malaysia export raw material for food industry to Thailand (palm oil

and vegetable), Vietnam (palm oil)



AEC 2015-Impact to the Food Industry In Labor

free movement of skilled labour and technology.Malaysia rapid economic development cause

shortest of skilled and low skilled workers3 million foreign low skilled workers mostly from

Indonesia, Philippines,Thailand,Cambodia and Vietnam,Malaysia hired skilled worker from SingaporeAlso export Malaysia skilled worker to Singapore.



AEC 2015-Impact to the Food Industry Technology

Technology transfer through:Procument finished good from ASEAN countryEquity participation in ASEAN viable project and business.Hiring professional and skilled worker for ASEAN viable project and

business.Training in food related industry in ASEAN countryPlacement of Trade office and representative in ASEAN country to

promote bilateral tradeLicense for Contract Manufacturing and business among ASEAN

country servicesRules for Trade Pattern and Copyright accepted by ASEAN country.



AEC 2015-Impact to the Food Industry In Governments Policy and Plan

Since 2011, AEC has agreed to strengthen the position and increase the competitive edges of small and medium enterprises (SME) in the ASEAN region.[

Comprehensive Investment AreaThe ASEAN Comprehensive Investment Area (ACIA) will

encourage the free flow of investment within ASEAN. The main principles of the ACIA are as follows[72]All industries are to be opened up for investment, with

exclusions to be phased out according to schedulesNational treatment is granted immediately to ASEAN

investors with few exclusionsElimination of investment impedimentsStreamlining of investment process and proceduresEnhancing transparencyUndertaking investment facilitation measures



http://en.wikipedia.org/wiki/Small_and_medium_enterpriseshttp://en.wikipedia.org/wiki/Small_and_medium_enterpriseshttp://en.wikipedia.org/wiki/Small_and_medium_enterpriseshttp://en.wikipedia.org/wiki/ASEAN#cite_note-aseansec2-71


Export-Oriented EconomyForeign Investment PolicyVision 2020Government Transformation ProgrammeNational Food PolicyMalaysia as World Halal Hub




Malaysia's exports grew by 11.1% to USD $19.6 billion whereas imports grew by 9.4 % USD15.9 billion in April 2011According to the world investment report 2011 released

recently by the United Nations Trade and Development Agency, the foreign direct investment to Malaysia soared 536 per cent toUSD $9.3 billion in 2010, constituting the highest record in thehistory. driven by the free trade agreements and strong pressure from

relevant countries to open up our market



AEC 2015-Impact to the Food Industry In Market Opportunities & Challenges

The global market for food ingredients was estimated to be worth roughly USD25bn (18.5bn) in 2007, and is expected to reach $30bn by 2010, demonstrating a growth rate for the market of 5-6% year on year.Globally, food ingredients is a multibillion dollar

industry and is fast expanding, growing in sync with the processed food market. Innovation in the food and beverage market, especially in processed foods, has created innumerable opportunities for new product development in the ingredients market too.



Fi Global Market

Consultant's Corner Aditi Basu/Frost & SullivanThe global market for food ingredients was estimated to be

worth roughly $25bn (18.5bn) in 2007, and is expected to reach $30bn by 2010, demonstrating a growth rate for the market of 5-6% year on year.Globally, food ingredients is a multibillion dollar industry and

is fast expanding, growing in sync with the processed food market.Innovation in the food and beverage market, especially in

processed foods, has created innumerable opportunities for new product development in the ingredients market too.Growing urbanization, changing lifestyles and the need for

convenient healthy foods have ushered in a new category of functional and health foods that claim to be fortified with certain new-age health ingredients offering functional health benefits over and above the basic nutritional value of the foodstuff.



AEC 2015-Impact to the Food Industry In Market Opportunities & Challenges

Malaysia offer attractive package for halal Fimanufacturing developmentMalaysia multicultural country offer best platform

for Halal Fi market R & DMalaysian government is encouraging world halal

food manufacturer especially Fi to takes advantage of USD 2.1 trillion potential market through Malaysia.

MAFPA offer helping hand to help Fi manufacturer to develop halal niche Fi in Malaysia



AEC 2015-Impact to the Food Industry In Working Together For Greater Opportunities & Challenges

We in Malaysia share your values and youraspirations, and we urge you to work with us. ThedecisionhadmadeASEAN"afriend,notanadversary;acolleague,notacompetitor;apartner,notarival",AllASEANcountriesandtheirpeopleswouldbeableto fulfil their truepotentialand secure theirplaceattheforefrontofthenewglobaleconomicsociety



THANK YOU



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ASEAN Economic Community 2015: Malaysian Perspective