Packaged food, meat to gain most from AEC Integration – Rabobank

September 9, 2015 5:00 am 

SINGAPORE, Sept. 8 — Rabobank predicts that packaged food and meat sectors will gain most from the formation of the ASEAN Economic Community (AEC), growing five and four per cent per year respectively by 2020, outpacing global growth.

In a report titled 'AEC: One Large Non-Homogeneous Market' released today, Rabobank, the world's leading food and agriculture (F&A) bank, said it expected that Southeast Asian demand for packaged food and meat to exceed 52 million tonnes and 20 million tonnes respectively by 2020.

In comparison, global growth of packaged food and meat during the period will be three and two per cent annually, respectively.

Growing demand for packaged food and meat in ASEAN will be largely driven by higher average income and rising urbanisation, prompted by population growth which was expected to reach 670 million by 2020.

Rabobank said the AEC would provide a huge opportunity for the region's food and beverage business but local companies needed a regional strategy to compete against multinational companies (MNCs) as they upgraded their efficiency and competitiveness.

Currently, only 55 per cent of regional firms have an ASEAN strategy, compared with 81 per cent non-ASEAN companies.

Pawan Kumar, Director, Food & Agribusiness Research & Advisory of Rabobank said apart from formulating regional strategy, local F&A companies needed to have better access to funds and strong management in order to compete against the MNCs.

The report also highlights strategic national trade barriers, including the protection of rice and sugar industries of Indonesia, malaysia and the Philippines from being flooded by cheaper imports from Thailand or Vietnam, apart from common food production challenges and quality differences. (PNA/Bernama)

LAM/CDN

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