Presentation material from Finpro Growth Market seminar in Helsinki October 23 2012.

1. Doing Business in Asia
Jari Hietala

2. Finpro’s Global Network – Asia and Russia
24/10/2012 © Finpro 2

3. Finpro’s Global Network – Australia, Malaysia,
Philippines and Singapore
24/10/2012 © Finpro 3

4. Finpro’s Network in China
Sep 2009 © Finpro ry

5. FINCHI – a platform of optimizing your
value in China entrance
 Plug & Play style of equipped office space
 State-of-art services assist your daily operation
 Full access to local contacts and bussiness networking
No Registration or Injection Capital needed, but all local activities could
be realized with FinChi turn-key solution. www.finchi.cn
10/24/2012 5 Copyright @ 2010 FinChi

6. FinChi Innovation Center - www.finchi.cn

7. The Importance of Asia For
Finnish Companies
24/10/2012 © Finpro 7

8. WORLD GDP 2050
• According to Goldman Sachs, this is the most likely scenario of
World GDP in 2050
– Note the position of Asian countries
2050

9. Asia and Finland in 2010
Asia and Middle East in 2010
1,6
1,4 The bubble size indicates GDP based on
China PPP in 2010. The bubble size indicates
also the country's share of the total GDP
1,2 India of all countries included in the graph.
Population (billions)
1
0,8
0,6
0,4
Indonesia
0,2 Japan
Philippines
Vietnam Thailand Korea Australia Singapore
0
-10 0 10 Malaysia 20 30 Finland 40 Hong 50 60 70 80
Kong
-0,2
GDP based on PPP per capita (thousands)
Source: IMF, World Economic Outlook, September 2011
Note: Amounts in current international dollar
24/10/2012 © Finpro 9

10. Asia 2016
Asia and Middle East in 2016E
1,6
1,4 The bubble size indicates GDP based on
China
PPP in 2010. The bubble size indicates
India
also the country's share of the total GDP
1,2
of all countries included in the graph.
Population (billions)
1,0
0,8
0,6
0,4
Indonesia
0,2 Japan
Saudi Hong
VietnamPhilippines South Kong
Thailand Arabia Singapore
0,0 Malaysia Korea Australia UAE
-10 0 10 20 30 40 50 60 70 80
-0,2
GDP based on PPP per capita (thousands)
Source: IMF, World Economic Outlook, Sept 2011
Note: Amounts in current international dollar
3/4/2012 © Finpro 10

11. Special Charasterics of Asian Markets
• There is no one homogenous Asian market – analyze and select the right
markets for your company and products
• There is one common feature in all Asian markets: the Chinese business
culture – it’s not what you know but who you know – invest to establish and
maintain your personal contact network, Guanxi
• There are a lot of so called “opportunistic” trading houses, which are eagerly
looking for principals and suppliers from all over the world for example at trade
fairs
– It is not a big challenge to find a sales channel representative for any
company – the real challenge is to get business going
• Often the channel partners would like to represent your products in several
markets in Asia. Watch out as this has very seldom proved to be successful
• Verify your partners’ Guanxi
• There are also several Finnish (and European) channel partners available –
easy and safe option perhaps, but how does your end customer value them
compared to truly local companies?
• Asia is full of trading houses whose main sales argument is the price – it is
challenging to find partners capable for value selling

12. Marine Cluster – East Asia
• China
– New vessels
– Value added vessels
• Cruise ships
– Marine equipment manufacturing
China’s evolving shipbuilding industry
– Offshore oil & gas facilities “The shipbuilding industry has undergone vast
• Bulk ships and container ships development during the 11th Five-Year Plan
• Liquefied natural gas storage (2006-10). Chinese shipyards surpassed South
tanks Korea to become the world's top manufacturer in
• Japan terms of new deliveries, new orders and
outstanding orders”
– Port development and re-building “The Chinese shipbuilding sector is reportedly on
– Bulk ships and container ships the cusp of evolving - and seeking to increase the
share of, for instance, container ships and liquefied
• South Korea natural gas storage tanks”
http://europe.chinadaily.com.cn/epaper/2012-
– Ship ICT 05/11/content_15269649.htm
– Arctic know-how
– Green ship solutions such as
eNavigation
– Offshore equipment &
components
24/10/2012 © Finpro 12

13. Marine Cluster – South East Asia
• Australia • Philippines
– Commercial shipbuilding – Auxiliary equipment
– Military naval vessels – Software and simulation systems
– Repair sector – Design, port facilities,
• Container ships, cruise liners etc management tools
• Indonesia
– Auxiliary equipment production • Singapore
– Navy and Coast Guard – Electronics communication and
– Port development and waterways navigation, automation precision
development in general machining, and corrosion control
– Ship IT, design, equipment for – Diesel engines and turbochargers
shipyards, training software and – Ship design and consultancy,
some offshore applications marine inspection and surveying
– Modernization of
production/management of large • Vietnam
state owned shipyards
– 5th biggest shipbuilding country in
the world
• Malaysia
– Innovative design, power
engineering and cutting edge
technologies
– Defence related sector,
particularly the EW sector
24/10/2012 © Finpro 13

14. Paper and Pulp Industry – East Asia
• China
– R&D and education Paper industry on track to grow
“The country's paper industry is poised for further
– Chemical agents strategic growth this year under the ongoing
framework of China's 12th Five-Year Plan (2011-
– Electronics 2015), which encourages fundamental structural
reforms to accelerate the industry's development.”
– Metal manufacturing “The government's plan explicitly labeled the paper
industry a new source of economic growth that
– Transportation positively drives related businesses. The plan
provides that China's paper industry should step up
– Equipment manufacturing structural reforms in order to transform its paper
enterprises into sustainable modern businesses.”
– Packaging industry http://usa.chinadaily.com.cn/epaper/2012-
05/03/content_15198925.htm
24/10/2012 © Finpro 14

15. Paper and Pulp Industry – South East Asia
• Indonesia
– Large existing P&P and forestry industry with well known
players for Finnish suppliers. Upgrading and process
improvements ongoing on several sites
• Malaysia
– Sarawak area cheap energy
– Large scale pulp mills in the east
– Technology suppliers
• Vietnam
– P&P industry lacking raw material
– New small scale plantations profiligating
– Equipment for mechanical wood working industry and
some upgrading of the existing P&P facilities
24/10/2012 © Finpro 15

16. Oil and Gas Industry – South East Asia
• Australia • Philippines, Vietnam, Burma,
– Skills and training Cambodia and Thailand have some
– Infrastructure suppliers Oil and Gas industry – mostly for
– Technology supplier domestic consumption
– LNG projects
– Transports and logistics • Singapore is a hub for many
infrastructure multinationals and for design and
also a location for supply companies
• Indonesia to the industry
– Offshore oil and gas production
– Support equipment related
Oil and gas might be the next big thing
“Kuala Lumpur: In a report last week, CIMB
Research said oil and gas companies are
• Malaysia expected to post their record high earnings this
– Engineering services year. Much of the research house optimism is tied
to Petroliam Nasional Bhd’s (Petronas) plan to
– Geotechnical resource centre boost output by developing new and marginal
fields. As early as last mont, Petronas had
– Energy efficiency announced that it plans to incest up to RM300
– Oil storage billion over the next five years, or up to RM60
billion a year, to develop new fields, and initiatives
– Exploration to develop marginal fields“
http://www.btimes.com.my/Current_News/BTIMES
/articles/ong29/Article/
24/10/2012 © Finpro 16

17. Renewable Energy – East Asia
• China • South Korea
– Energy efficiency technologies – Solar cells
– ESCO / EMC business in
process industry – Windmills
– Recycling and waste – Smart grid
management – Lithium batteries
– Advanced nuclear energy
– Biomass
– Re-forestation and sustainable
use of forests
– Wind energy Winds of change blow through China
“World's biggest polluter spends £4bn a year on wind
– Solar power and solar power generation in single region as it aims
– Hybrid and pure electric vehicles to cut fossil fuel use.”
– Heat pump technologies “Jiuquan alone now has the capacity to generate
• Heat sources: waste heat, 6GW of wind energy – roughly equivalent to that of
water, ground, air the whole UK. The plan is to more than triple that by
2015, when this area could become the biggest
– Water source heat pump windfarm in the world.”
technologies “- plan to supply 15% of the country's energy from
– Smart grids alternative and renewable sources by 2020.”
http://www.guardian.co.uk/world/2012/mar/19/china-windfarms-
• System integration renewable-energy
• Telecommunication solutions
– Energy efficient urbanization and
building
24/10/2012 © Finpro 17

18. Renewable Energy – South East Asia
• Indonesia
– Biomass related opportunities
• Malaysia Palm oil industry in Malaysia
– Up to € 400 million soft loans “The palm oil industry has considerable potential to
available for RE projects support the nation's economy through the provision of
renewable energy as well as through traditional export
– Solar of agriculture commodities.”
– Biomass “The challenge for this industry, is to organise
economical logistics to make sure that the biomass
– Biogas are collected and brought to a central factory or
– Mini-Hydro processing plant, while at the same time, providing
opportunities to generate new jobs and create new
– Solid Waste business opportunities.”
“Malaysia and Indonesia currently account for 87
percent of the world’s palm oil production”
• Philippines
http://www.btimes.com.my/Current_News/BTIMES/articles/palmo/
– Geothermal Article/
http://www.btimes.com.my/Current_News/BTIMES/articles/8MUM
– Hydropower BAI/Article/
– Biomass
– Wind, solar and ocean energy
24/10/2012 © Finpro 18

19. Municipal Solid Waste – East Asia
• China • South Korea
– WWTP sludge and urban water – Vacuum waste collection market
body (river and lake) sediment
dewatering – Composting facilities
– Economical & ecological energy – Energy plants
recovery
• Further processing of the solids
– World’s largest Foster Wheeler
with economical and ecological 4x550MW
benefits
– Smart and intelligent MSW
collection and transportation
• Carrier capacity, higher
processing and storage capacity
• Smart waste transportation i.e.
pneumatic in specialized areas or
industrial sectors.
– Optimization or upgrade of MSW-
to-energy incineration plants
• Burning efficiency with higher
energy output
• Dioxin online measurement in the
furnace stack is a hot issue
– Kitchen waste processing and
treatment
• Onsite kitchen waste disposal in
urban areas
24/10/2012 © Finpro 19

20. Municipal Solid Waste – South East Asia
• Malaysia
– Solid Waste Management
– Integrated Municipal Solid Waste Facility
– Waste To Energy
– Incinerators
– Industrial Furnaces Health ministry cleans up wet markets in
Jakarta
– Turnkey Projects "In close cooperation with the Trade Ministry, the
Health Ministry is making efforts to improve
sanitation in traditional wet markets under the “Pasar
Sehat” (healthy wet market) initiative. Under the
program, eight new wet markets have been opened,
which cost the Health Ministry Rp 994 million (US$
105,364).Under the program, each traditional market
receives Rp 45 million.Some of the wet markets
targeted in the program include one in Samosir,
North Sumatra, and another in Sikka, East Nusa
Tenggara. “It’s not a lot of money, but enough to fix
the plumbing, sewer and waste treatment facilities”
The Health Ministry has increased the budget for the
program to Rp 1.5 billion for 2013.”
http://www.thejakartapost.com/news/2012/07/30/he
alth-ministry-cleans-wet-markets-considered-
breeding-ground-disease.html
24/10/2012 © Finpro 20

21. Software and Digital Media – East Asia
• China
– Mobility & TMT market
– Wireless devices and China Mobility and TMT Markets Developing
cloud based applications Rapidly
"TMT, mobility, and technology companies continue
– Digitainment & to seek effective methods to enter and expand in the
China market. This includes effective alliances &
Entertainment partnering and increasingly strategic investments
and M&A…”
– Intelligent automation “Now with over 800 million mobile subscribers and
400 + million internet users the China TMT, Mobility,
– IoT and Digital Media opportunities for foreign and
Chinese players are significant and growing. “
– OEM & ODM
http://www2.prnewswire.co.uk/cgi/news/release?id=
236440
24/10/2012 © Finpro 21

22. Software and Digital Media – South East Asia
• Malaysia • Philippines
– Multimedia Super – Software development
Corridor – Applications development
– Talented developers and and maintenance
engineers – IT operations and
– Tele-health infrastructure
– E-Government – business analysis, project
– Smart Schools management, education
– Animation & game
development
• 2D, 3D, Maya, 3D
Max,
Medical/Educational
Graphics & Animation
24/10/2012 © Finpro 22

23. Service Industries – East Asia
• China
– Education (reform ongoing)
• Teacher training
• Adult education
• Educational solutions International Tourism Expenditure of
– Outbound tourism Residents and International Departures
– Architecture
85
– Engineering services, industrial
design 75
– Consumer design products 65
– BPO
55
• South Korea 45
– The market is opening due to the 35
FTA’s
25
• Marine services and education.
– Increased awareness and
interest in the Finnish Departures (million)
education system from
Korean side. The market Expenditure (billion
is extremely large in USD)
Korea
BMI China tourism report Q3/2011
• Care services
24/10/2012 © Finpro 23

24. Service Industries – South East Asia
• Malaysia • Philippines
– Tourism – Globally number 1 in
– Higher Education voice, number 2 in non-
– Vocational training voice and complex
IT/BPO services
– Engineering services
– Contact centers
– Outsourcing
– Back-office operations
– Complete Logistics value
chain – Knowledge-process
outsourcing
– Software development,
animation & game
development
– Engineering design
24/10/2012 © Finpro 24

25. Life Sciences – East Asia
• China • South Korea
– Food safety (tainted food & food
diagnostics) – Food (functional)
– Food chain, traceability & RFID – Interior materials & Design
application
– Contract Research & Manufacturing
– Cancer early diagnosis and therapy
– Modernization of Traditional
Chinese Medicine (TCM) Life sciences enter top sectors ranking for
– Sports Industry: health concept, foreign investment
fitness in fashion
– Dental / mouth care in China "With its growing and youngest population in
the world, the Asian continent offers great
– Rural Healthcare, telemedicine,
business opportunities to global pharma,
sensor application
medical and healthcare companies. To
– Biomaterials & implants effectively respond to the growing demand
– Medical waste disposal solution for healthcare, Eli Lilly, Lonza Group,
– Reforming of medicine distribution Novartis, Merck KGaA, Novo Nordisk, Pfizer,
channels & hospital management they all further consolidated their presence in
– Textile and garment sourcing in the Chinese market. Shanghai figures as the
China most attractive destination in the country,
followed by Beijing and Hong Kong, where
– Occupational health/health also the presence of top research institutions
promotion guarantees good availability of skilled
– Digital health care/home care labour.”
www.life-science.se/se/74
24/10/2012 © Finpro 25

26. Life Sciences – South East Asia
• Indonesia • Philippines
– Health care coverage for all – Construction and upgrade of
citizens to be implemented by hospital buildings and facilities
January 2014 and other social – Purchase and supply of modern
security benefits for workers by hospital equipment, furniture and
July 2015 at the latest fixtures
– Middle class thriving for better – Installation of a comprehensive
medical care hospital IT system
– Diagnostics, rural healthcare – Medical tourism – world class
hospitals
• Malaysia
– Medical Devices
– Biomaterials and implants
– High-tech Diagnostic Systems
– Early detection methods
– Rural Healthcare, telemedicine,
sensor application
– Medical waste disposal solution
24/10/2012 © Finpro 26

27. Thank You!
24/10/2012 © Finpro 27