Deloitte, the global professional services firm, is allocating a US$ 400-million (Bt12.75 billion) investment for Asia in the period to 2015, with $ 40 million to $ 60 million of the amount expected to be for operations in Southeast Asia, including Thailand, ahead of implementation of the Asean Economic Community (AEC).
Subhasakdi Krishnamra, managing partner of Deloitte Touche Tohmatsu Jaiyos and chairman of Deloitte SEA, said that despite the euro-zone crisis, the fragile US economic recovery and a slowdown in China, there is optimism over Asean.
As companies in Thailand and elsewhere in the region press for cross-border expansion along with other professional services, Deloitte sees the need to strengthen its human capital to serve clients’ needs. The investment will be directed predominantly to talent acquisition and retention, he said.
Last year, Deloitte’s Thai operations recruited nearly 100 people, and a further 130 are expected this year. Meanwhile, it hosted 60,000 training hours last year, which is equivalent to about Bt50 million if the hours were used to serve clients, he said.
“There’s a growth opportunity in Southeast Asia. Investors from Japan and elsewhere are still seeing the opportunity. By 2015, we’ll be ready to serve and lead clients towards cross-border investment … The unfolding debt crisis in Europe and its impact is still a risk factor that should be closely monitored. Emerging-market currencies are likely to remain volatile. The possibility of defaults or, worse still, the collapse of the single currency itself, could lead to sharp falls in the value of the baht and other emerging-market currencies,” Subhasakdi said in a group interview yesterday.
He acknowledged that the $ 400-million investment was huge, compared to what the company had spent in the region in the past.
To Subhasakdi, the AEC is expected to offer the opportunities for growth, though the global economy in general still depends on developments in the euro area’s debt crisis, as well as a possible worsening in the slowdown of the Chinese and Indian economies.
In the 2012 accounting year, ending May 31, Deloitte Asia saw an average 20-per-cent growth in revenue, despite the meagre 4-per-cent rate in Thailand as a result of the floods. For this year, revenue is expected to grow by 12 per cent both for Thailand and the entire region, he said.
The investment is part of the global firm’s target to boost its overall revenue from $ 3 billion last year to $ 5 billion in 2015. With revenue of $ 330 million last year, Southeast Asia contributed 10 per cent of worldwide business. Thai revenue was Bt1.1 billion (about $ 35 million).
The AEC is expected to boost demand for consulting business and services on taxation, human/capital movements, and risk mitigation.
Last year, in preparation for the single market, Deloitte’s operations in seven countries in the region became one. This allows a freer flow among its 5,500 staff, including 800 in Thailand, to serve clients, he said.
“One and Borderless-Boundless are our global strategies for all member firms to work together to strengthen our collective leadership and client service capabilities through diversity and connectivity.
“Deloitte has been prepared for the AEC since 2006. By a coming together of [our operations in] seven countries in Southeast Asia, we’re able to bring skill sets – knowledge and expertise – to our clients across many industries. We have been prepared for the unity of the marketplace and to be as one with our clients as they move forward to realise the benefits of coming together in the AEC,” he said.
Despite last year’s floods, Thailand is now demonstrating recovery momentum and exports are still expanding, despite global risk factors. However, Subhasakdi expects rosier growth from Indonesia, Vietnam and Singapore.
Supported by a population of more than 200 million and plentiful natural resources, Indonesia is attracting investment in both its resources and manufacturing. Vietnam, despite its small economic size, shows the sharpest growth. Singapore is also growing, with financial activities moving from Hong Kong, he said.
Deloitte in Thailand now expects to have more Japanese clients following a joint consulting service with Deloitte in Japan, as several firms are establishing production bases and moving their regional head offices to the Kingdom.
Moreover, as Myanmar opens its doors, Deloitte Thailand is surveying for business opportunities in the neighbouring country, after completing a feasibility study for Dawei deep-sea port financing for the Japan International Cooperation Agency. Subhasakdi expects to open a representative office there by the end of this year, to serve clients in both Thailand and Japan.
Despite the proximity, much of Deloitte’s service to Myanmar would come mainly from the Singapore office, and not Thailand, given the strong relationship between people in the two countries. What he plans to do is ensure that the Thai office can assist in that.
Source: http://www.nationmultimedia.com/business/Deloitte-earmarks-$ 400m-to-boost-asian-operations-30185040.html