Fresh opportunities as SE Asia integrates

As the world’s largest producer of packaged consumer products, P&G, with total worldwide sales of US$82 billion in 2011, is boosting its utilisation of tax and other benefits in the 10-country Asean regional grouping.

Asean groups together Thailand, Malaysia, Singapore, Indonesia, the Philippines, Brunei, Myanmar, Vietnam, Laos and Cambodia.

“Here in Thailand, we have manufacturing facilities for hair care and beauty care products for both domestic and export markets under the brandnames of Pantene, Rejoice and Head & Shoulders.

“We also produce Vidal Sassoon hairdressing and hair care products for export, as well as Oil of Olay skin care products.

“In fact, we consolidate our professional salon products here at the Well Grow industrial estate on the Bang Na-Trad Highway, that serves 30 foreign markets.

“P&G Thailand is also the second largest P&G exporter of hair care products in the world.

“Among Asean countries, Thailand has the biggest capacity for these production categories.

“We also have production facilities in Vietnam, where we produce laundry and baby care products under Tide (for detergent), Pampers (for baby diapers) and Downy (for fabric enhancers). In the Philippines, we produce Pampers, Whispers and laundry brand Tide as well as Downy.

“In Indonesia, we have broken ground to build a new factory for baby care products, which should be completed in a couple of years from now.” 

One of the things that the upcoming Asean Economic Community (AEC) has been espousing is the freer flow of goods among the 10 Asean countries, which have a combined population of nearly 600 million.

“This means we can move our goods more freely across national borders with zero import tariffs – which allows more flexibility on pricing. In terms of logistics, there are cost savings in the cross-border supply chain, with fewer products sitting at ports. This results in a leaner operation.

“In other words, we gain from the economies of scale and the economies of speed and the ability to respond to consumer needs faster due to closer locations of the production facilities.

“In terms of a combined market, there are still a lot of opportunities. In Thailand, for example, we have introduced less than 10 out of the total 20-plus product categories now available in more developed markets.

“For cross-border marketing and advertising in Asean, we share a common overall platform for brand building, but we do localise for each of the individual markets.

“In terms of consumer behaviour, there are more similarities than differences. Generally when the economy improves, people are willing to pay more for higher-performance products, so we continue to address the needs of these consumers and deliver better value for money.

“For Asean and other Asian consumers, value for money weighs more in their decision making when compared to Western consumers.

“In terms of product innovation, Downy single rinse is one example which has help improved the Thai market over the past two years. This fabric softener allows you to get the benefits with one rinse, so it saves water and the environment.

“Another example is our new air refresher. We do not mask the foul odour with strong perfume, which is usually the case, but our new technology is more effective as it covers the molecules that create the smells, so the product is longer-lasting,” he said.