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Fifty Fast-Growing and Globalizing Companies Highlight Southeast Asia's Economic Resurgence, According to The Boston Consulting Group

These Southeast Asia Challengers Highlight the Region's Resilence and Economic Vitality (March 14, 2012)

SINGAPORE -- (Marketwire) -- 03/15/12 -- Fifty companies, the Southeast Asia challengers, have been rapidly expanding, competing in the Asian and global economy, and throwing a spotlight on a region that has experienced an economic renaissance that has largely escaped attention, according to a report published today by The Boston Consulting Group (BCG).

The 50 Southeast Asia challengers range in size from $500 million to $63 billion in annual sales. They represent a study in both geographic and economic diversity. Malaysia and Indonesia each have 12 companies on the list; Singapore and Thailand, 11 each; and the Philippines and Vietnam, 2 each. Companies from the food and beverage (11) and agricultural-commodity (8) industries are most represented on the list, followed by companies from the real estate and construction, transportation and logistics, and utilities industries, with 4 each.

There are, of course, many more than 50 noteworthy Southeast Asia companies. The list focuses on those with international ambitions. Since 2001, the number of cross-border deals announced by the 50 challengers has increased by 22 percent annually, while the number of their domestic deals has risen by just 1 percent annually, according to "2012 BCG Southeast Asia Challengers: The Companies Piloting a Soaring Region."

"While China and India have been receiving most of the headlines over the past ten years, many Southeast Asia companies have been quietly and confidently creating international businesses," said Vincent Chin, a partner in BCG's Kuala Lumpur office and a coauthor of the report. "The success of the Southeast Asia challengers and the region they represent is one of the world's best-kept secrets."


The Southeast Asia challengers are growing more swiftly and are more profitable than comparable multinationals from developed markets. From 2001 through 2010, they averaged sales growth of 18 percent and EBITDA margin of 15 percent. A $100 investment in January 2000 in a hypothetical Southeast Asia challengers index would have grown by 14 percent a year and have been worth more than $590 in December 2011, compared with $359 for a similar investment in the MSCI Emerging Market index and $208 for an S&P 500 investment.

If Southeast Asia were a nation, it would qualify as a high-profile BRIC (Brazil, Russia, India, and China). Global companies overlook the region at their peril.

In addition, Southeast Asia is fast becoming an integrated region, with Singapore as the hub of financial and logistics activity and an example to other nations of what they might achieve.

Indeed, the region has been reshaping itself into the economic force that -- in the early 1990s, before the Asian financial crisis deflated economic progress and expectations -- many had foreseen for it.

Today, the region is on much stronger footing. For example, the capital ratio of banks -- a measure of their ability to withstand losses -- is much higher today than prior to the Asian financial crisis. Among banks headquartered in emerging markets, those in Southeast Asia recorded some of the highest total shareholder returns between 2005 and 2010. These structural improvements helped Southeast Asia weather the recent global crisis better than most other regions.

Methodology for Selecting the 2012 Southeast Asia Challengers

In order to generate the list, we initially took a close look at more than 500 companies. Each company had to be headquartered and have major operations in the region, have annual revenues of at least $500 million, and be growing and profitable. Furthermore, each company also had either to hold a top-five market position in the region or be growing significantly faster than its peers. Finally, each company had to demonstrate either proven ability to go international or the strong potential to do so. Companies that had already held strong global positions for five years or more were excluded.

The Southeast Asia challengers are works in progress. In terms of their global growth, they are no longer caterpillars but not yet butterflies. Accordingly, we have excluded many noteworthy companies at both the top and bottom of the market. Companies that have been leaders in their respective industries for many years -- for example, Singapore Airlines and Petronas, a Malaysian energy company -- can no longer be considered challengers: they are already champions from the region. A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 75 offices in 42 countries. For more information, please visit bcg.com.

About bcgperspectives.com
Bcgperspectives.com is a new website -- available on PC, mobile phone, and iPad -- that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.


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