Nov 5, 2012

Thailand - Asean agrifood businesses urged to look to Europe

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AMSTERDAM: Agrifood businesses in the Netherlands still have room for prospective investment from Asean agricultural entrepreneurs who can enjoy the benefit of increasing demand for high-quality foods.

Nico Overbeeke, senior adviser to the Netherlands Foreign Investment Agency, said Asean countries have provided good food raw materials, especially Thailand's poultry industry.

The ability to reach European Commission food safety standards is a key element for sharing the benefits of Europe's huge catering industry, he said.

In the Netherlands alone, agricultural imports from Asean countries have contributed to 4.4% of total imports.

The value of agrifood imports to the European Union dramatically increased from 7.56 billion in 2004 to 12.4 billion in 2008.

"We can say that the agrifood industry has played a key role in our economic growth. Its value is about 10% of our GDP. We expect to see higher turnover from the business in the future," said Mr Overbeeke.

He said the prosperity of agrifood is not related to high volume, as there is no significantly increasing population in the region, but from product prices increasing as a result of value-added items in terms of better life quality.

"We have invited not only big investors but also small and medium-sized entrepreneurs that are keen on developing products through research and development. In the Netherlands, 70% of exports are from SMEs," said Mr Overbeeke.

In the Netherlands, the government has spent 0.06% of its gross domestic product on supporting private investment in research and development, which has led to 22% of food products becoming value-added items for consumers' better health.

For example, researchers found that bacon and bread businesses had reduced salt by 30%, helping people to avoid salt-related diseases that threaten the health of many Europeans.

Bas Pulles, a commissioner in the NL Agency of the Economic Affairs, Agriculture and Innovation Ministry, said the Netherlands and other Northern European nations had not been affected by Europe's financial crisis.

The Dutch have also offered friendly tax rates to foreign investors of 20% for profits up to 200,000 (1.89 million baht) and 25% for profits exceeding that sum.

Mr Pulles said the Netherlands is the centre of exports and re-exports to Europe as a result of its aviation and logistic hubs.

Schiphol Airport near Amsterdam has 270 direct and connecting flights to 90 countries.

The high-speed train service takes about three hours to Paris, four hours to London and 3.45 hours to Frankfurt.

"We already have 6,300 foreign companies invested in our country including Japan, South Korea and China. But we don't have many companies from Asean, with only a few from Thailand. I think Asean should try to benefit from the Asean Economic Community (AEC) by expanding their business to Europe," he said.

Bob Steetskamp, a programme director at Priority Sector Agrifood, said the Netherlands plans to increase exports to Asean countries after the AEC is launched.

Its food exports to Asean comprise 5.5% of total food exports compared with 80% to EU countries.

"We're not focusing only on emerging markets such as Brazil, Russia, India, China and South Africa but also the Asean market. We believe that an increasing number of middle-class people will help us increase our turnover, as this group is willing to pay more money for products that are of high quality," said Mr Steetskamp.

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