By Erich Parpart
The intended slowdown in China has not diminished Deloitte’s bullish view on the region. It is looking to spend "tens of millions of US dollars" a year to hire financial experts and talent in the region.
"Asean is Deloitte Global’s main target of business expansion in 2016," Chaly Mah, chief executive officer of Deloitte Southeast Asia, told a press conference in Bangkok yesterday.
"Because of the potential for Southeast Asia’s 620 million people, which is considered to be a big consumer market, we are seeing major international corporations that are starting to make acquisitions."
Many Japanese companies are buying into the consumer-type business in Southeast Asia so that they can gain access to the future potential of the region, he said.
Quoting the International Monetary Fund, he expects the region’s economy to expand from US$2.5 trillion to $4.3 trillion and eventually become the fourth-largest in the world by 2020.
Regional gross domestic product growth is estimated at about 5 per cent every year until then. China’s economy would expand by about 7 per cent next year.
"Chinese firms have yet to make big acquisitions. But in the past they have been making investments in energy resources and more recently we have seen the Chinese buying into food companies to secure food supplies.
"So I think those [Japanese and Chinese firms] are the two major investment groups," he said.
Not many European firms are making merger and acquisition moves due to the slowdown in the euro-zone economy.
US companies have always been looking at this part of the world but their moves remain minimal.
Deloitte Global has logged $35.2 billion in revenue as of May, up 7.6 per cent from the same period last year. Deloitte Southeast Asia contributed $454 million, of which $42 million was from Deloitte Thailand.
Deloitte Southeast Asia plans to increase its revenue 9 per cent to at least $500 million by May of next year from its businesses in the 10 Asean countries.
It is opening offices in Myanmar, Laos and Cambodia, growing its consulting business and digital advisory services, and hiring more partners and digital experts to follow the new wave of global digitalisation, he added.
Subhasakdi Krishnamra, managing partner of Deloitte Thailand, said the firm is planning to expand by at least 12-13 per cent in the same time from the expected increase in employment of digital experts. It currently has about 1,000 personnel.
It is preparing for more business from the government’s pursuit of the digital economy, demand for tax advisory services driven by tax reform and the expected increase in initial public offerings.
The Securities and Exchange Commission is pushing for more IPOs, especially in the alternative energy industry.