GERMAN INDUSTRY KEEN TO DEVELOP TIES WITH ASEAN

By Manik Mehta

BERLIN, May 19 (Bernama) -- German industries are very keen to further
develop their ties with Asean, which they perceive, as a large consumer
market of nearly 600 million people behind China and India.

The global economic and financial crisis has also underlined the
vulnerability of the German industry which, until now, relied on the markets in
the European Union, North America and Japan.

However, the crisis has also highlighted the limits of these markets to
absorb upper-end German products, which in the past two to three years, saw a
steady decline in demand in the traditional Western markets not only because of
a severe recession but also because of the strength of the Euro which made
German supplies very expensive.

Though China and India will, undeniably, continue to rule the roost in Asia,
there is a growing perception, in Germany's corporate sector, that Asean is also
an interesting region which can absorb sophisticated German products.

This was a key factor why the German industry decided to stage its
just-ended three-day Asia-Pacific conference in Singapore.

German Economics Minister Rainer Bruderle who attended the conference
described Asia as the "growth centre of the global economy".

Indeed, many German companies are not just setting up shop in Asia,
including the Asean region, but also migrating lock, stock and barrel to the
continent.

Such a development also spells huge cash flows in terms of investments.

The evolving strategy of Germany's corporate sector is to "operate from
within the market" rather than just manufacture in Germany and export the
products to the market.

Hubert Lienhard, the Chief Executive of Voith, Germany's leading
machine-building company, stated on the sidelines of the massive Asia-Pacific
conference in Singapore recently, that China was "only the beginning, while
India will bring a second major growth wave and Southeast Asia the third".

The three poles of China, India and Asean, with Malaysia assuming a key role
within Asean, have become the propelling drivers behind the German industry's
newly acquired bullishness.

Indeed, Franz Fehrenbach, the Chief Executive of Robert Bosch, which has
extensive operations in Asia, was upbeat about Asia's growing significance for
the German industry in the future.

Malaysia, with its well-established infrastructure and qualified personnel,
can make a strong pitch as a suitable platform for the German industry in
Southeast Asia.

In particular, Malaysia's attributes as a stepping stone in the region for
high-tech industries, biomedical industry, petrochemicals and the IT sector
should be fleshed out in the investment promotion strategy.

It is not surprising that Penang and the Kulim Industrial High-Tech Park are
widely known to many German companies that have ties with Asia.

"You strike the iron when it is hot. This is the time for countries such as
Malaysia to attract German companies that are scouting for sites to set up
operations in the Asean region," Wolfgang Roth, a German management consultant
told Bernama.

The Chairman of the Asia-Pacific Conference, Juergen Hambrecht, who is also
the Chief Executive of BASF, a leading chemical group, saw good opportunities
for the German industry in Asia.

He made a strong pitch for the German industry which, with its "outstanding
technologies and concepts" could further help Asia and support stability and
growth.

Asia, including the Asean region, has become "very important" for German
companies, says Hambrecht.

The continent's importance is reflected in the figures released by the
German industry.

Germany's total exports in 2009 declined 18 per cent but exports to China
had jumped seven per cent.

During the first-quarter of 2010, exports to Asia surged again by one-third
and to China by 50 per cent.

It is a widely acknowledged fact that many German companies had survived and
overcome the recession only because they were able to make profits in Asia.

Asia's rise is also making the United States look smaller in the eyes of
many German industrialists who are saying that they can no longer rely on the
dynamics of that market which has passed through a major economic upheaval.

On the other hand, the boom countries of Asia are also becoming increasingly
conscious of their strength.

Asean's Secretary-General Surin Pitsuwan, who was recently in Washington DC
with a group of Asean trade ministers, has been saying that Asia was setting the
standards today.

It was not without reason that many European companies recruited their staff
in Asia which offered young and,often, better educated and trained personnel.

Even as Asean countries aggressively court German investors, the German
industry is equally keen to establish close contacts with the Asean region which
holds out the promise of huge business potential for them.

Similar to what other Asean countries are doing, Malaysia needs to evolve
and formulate an effective strategy that will be an irresistible pull for the
German industry.

-- BERNAMA



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