Asia and Procurement “Emerged Markets” – Get Here or Go Home (Part 4)

The first three installments of this series can be found here:

In this concluding installment, we consider a number of anecdotes and observations based on the sourcing, social, political and business climates in additional countries and offer concluding recommendations.

Hong Kong

  • Even more expensive than Singapore – residents have to pay as much as 2X over Singapore prices per square foot!
  • Hong Kong just isn’t the international financial center it used to be. Although Morgan Stanley is still regionally headquartered there, most others have moved regional HQs to Singapore these days.
  • As anyone in the procurement world knows, an IPO in Hong Kong is so 1995. However, the region, logistically and due to its relatively closeness but outsider angle to China, has merits to warrant locating some talent in the region, if nothing as a jumping off point.

Malaysia

  • The place where Muslims, Christians, Buddhists, Hindis and others peacefully and productively work together. That said, the sin taxes in the country have led to shockingly expensive wines and alcohol in general – yes, this was a dinner conversation at the ProcureCon Asia event!
  • The Penang (aka Georgetown) area that I visited has long-standing investments from a long list of top-tier fab and computer industry manufacturers (Intel, Motorola, stec, Infineon, Dell, Toray, Sony, Jabil, Saint Jude) as well as logistics centers. A busy place with construction and full employment.
  • The country represents a quirky blend of hi-tech and third-world infrastructure – the latest stainless, glass and concrete next to properties that (in the USA at least) would get tagged with “Condemned – do NOT enter” tags in a New York minute.
  • I saw a brand new Aston Martin navigating the less-than-predictable roads right next to the many miniature cars and locally made Protons and Peradua (cheapo Japanese and Korean knock-offs). Malaysia stubbornly insists on subsidizing its two car companies and as a result, import and registration penalties up to a staggering 250% of import value are assessed. That Aston I saw probably carried a dollar price tag in the very high six figures. There were several current generation BMW, VW, and Mercedes there as well – and the same 250% tax multiplier applies to those cars. Changes are coming as ASEAN and WTO memberships dictate. But it’s still expensive.

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