Asian demand to fuel
rising resource exports
The
Mekong subregion has great potential to pay high returns on long-term
investment in agriculture and related businesses, say investors.
Regional
support facilities and a growing population can serve as entry points for many
businesses, agricultural aid fund managers told an economic forum in Bangkok
yesterday.
But
climate change and a lack of financial facilities are key obstacles.
Simon
Hopkins, CEO of Milltrust International, said agricultural businesses in the
Mekong could tap the huge potential from feeding the growing Asian middle class
in Asia, especially in China.
A
big challenge lies in finding capital to fund business expansion, while
Thailand and Vietnam will find it difficult to obtain large plot of lands, he
said.
Marvin
Yeo, managing director of Frontier Investments and Development Partners, said
cost-effective agrarian land in the subregion is a key strength.
As
well, businesses stand to gain from the coming liberalisation of trade, capital
and movement of professionals under the Asean Economic Community.
"However,
the technology gap is an issue for the potential of agri-businesses in the
region. Thailand and Vietnam have to play a key role in plugging this
gap," said Mr Yeo.
While
investors see the potential for high profits from palm oil, he said attention
should turn more to rubber, tapioca and cassava to feed demand in Asia.
Technical
assistance is a vital part of investment strategy in agricultural businesses,
said Mr Yeo.
Desmond
Sheehy, chief investment officer at Duxton Asset Management, said the Mekong
subregion provides additional opportunities for the logistics industry.
One-third
of crop yields here are damaged due to a lack of facilities.
Mr
Sheehy said one challenge for businesses is how to upgrade themselves to become
more competitive internationally.
Relatively
more restrictive land rights are another hurdle.
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