Suppliers Weigh In with Cautious Optimism

IN OUR ANNUAL BAROMETER for the regional food & beverage industry, analysts and players provide their insight on what's ahead for the food and beverage sector. This year's Outlook is particularly significant because of the economic uncertainties facing many of the emerging economies. Economic growth in the Association of Southeast Asian nations, or ASEAN, may slow to 3.5% from 4.8% in 2008, the Asia Development Bank forecast last month. Our panel this year includes leading two Taiwan suppliers who are at the forefront of bringing their brands to emerging markets: Robert O-Yang heads Anko Food Machine Co., Ltd., which specializes in processing equipment for specialty and ethnic foods such as spring rolls, dumplings, ravioli, samosas, meat buns, won ton, and empanada, while Roger Shi is CEO of CSE Chiang Sung Enterprise Co., Ltd., a sanitary tubing and fittings company that is venturing into Southeast Asia. Representing the transnational players who have established a foothold in the region are three of the most active companies in Asia. Peter Grimley is president Asia of Sartorius Mechatronics, which is well known in many markets weighing, measurement and automation technology. Ricky Ong is sales manager for Asia of Heat & Control, experts in further and value-added processing. Sebastien Geffrault, Account Management and Marketing director for Sidel South East Asia Pacific, the regional unit of one of the world's leading solutions for packaging liquid foods. We asked or panelist: Given the volatile financial situation, what are the prospects for your sector and products in Southeast Asia? Are you changing your approach to the market? What sectors do you intend to focus on more closely?

Prospects for Sector

Grimley: I think it's clear that as an equipment supplier at a time of great volatility and uncertainty we are subject to a risk that projects and pending orders will be put on hold for a period of time. If as an organization you sell more to the balance sheet that to the P&L then normally you are the first to see the effects of an economic downturn. However I am still optimistic that any slowdown in food and beverage in Southeast Asia will, at least in Asia be limited. The existing and future development potential of this market, especially when linked with the immediate and growing consumer demand for food safety, traceability and transparency in manufacturing process means that producers of, and suppliers to high quality products will still gain significant growth. I believe the biggest risk to equipment suppliers in the short term will be an added pressure to prices in the market, which could have long-term effects on margins and put some smaller players at risk. O-Yang: The international financial tsunami wrecks nearly all kinds all kinds of business. Even the sales amount of some food manufacturers still increase, but their profit is much lower than before. Hence, most of them are afraid of investing new production facilities. Shi: Prospects for 2009 could be the worst or the best in this industrial chain ?opportunities exist in both circumstances. In both cases, CSE will keep on investing in improving product quality of our equipment. For Southeast Asia, in particular, we plan to establish our new sanitary tube line in Thailand. Ong: No doubt that the financial situation has an impact on the business sectors across the board. However, we tend to look at the long term and have been enjoying sufficient growth in the Asia region. Our strategy to increase manufacturing resources has enabled us to respond to changes in the market; this will benefit our potential investors in the future because we can still offer competitive solutions, including service during volatile situations. Geffrault: We observed a market droAir Jordan Westbrook 0.2