A country’s global competitiveness is reflected in the list of companies in the global stage. Among these are: ADM, Bunge, Cargill and Dreyfus (the ABCD) for commodities; and Pepsico, Coca Cola, Mondelez and Mars (USA), Nestle (Switzerland), JBS (Brazil), Danone (France) for food processing. The top global retailers are: Walmart, Costco (USA), Carrefour (France), Tesco (UK), Aldi and Metro (Germany) to name a few.
These companies built their nations, grew their exports and employed millions.
Let us journey to Southeast Asia. Asean countries exported some $152 billion worth of agri-food products to the world, and imported around $100 billion, giving a surplus of over $50 billion a year. Vegetable oils and rubber products comprised over half of exports, followed by fish and preparations, rice and coffee. Asean companies are playing major roles in exports. Below are the billion-dollar companies based on their 2013 revenues unless otherwise specified. The list may omit unlisted companies.
Singapore hosts Wilmar International (revenues: $46 billion) and Olam International ($17 billion). Wilmar is a global giant in the vegetable-oil value chain and in the league of the ABCD. It is the world’s leading player in vegetable oil. It owns the top retail brand of cooking oil in China and also owns sugar mills in Australia. Olam, a commodity trader—cashew, sesame, rice, coffee, and others —operates worldwide.
Singapore is also home to beverage maker Fraser & Neave ($3.6 billion). QAF Limited owns the Gardenia bread brand and pig farms in Australia ($800 million). An up-and-coming chocolate products company is Petra Foods ($500 million). Scorecard: 5
Indonesia has large conglomerates such as Astra, Sinar Mas, Salim and RGE. Sinar Mas subsidiary Golden Agri-Resources ($6.6 billion) is the world’s second-largest palm-oil plantation company with a total planted area of 469,600 hectares (including smallholders) in Indonesia.
Indofood/Salim Group looms large ($5.6 billion) with flour, plantations and palm oil processing. Japfa Comfeeds dominates feeds and poultry ($2 billion) while Mayorah Indah leads in confectionery products ($1.2 billion).
Asian Agri/RGE Group operates oil palm plantations, rubber plantations and cacao plantations in Indonesia and in Southeast Asia ($1 billion). Garuda Food group is a rising player ($800 million) along with food companies serving the domestic market. Scorecard: 6
Malaysia has several groups in the palm-oil value chains. Sime Darby had $14.6 billion in group revenues but only $4.6 billion in plantations. It is followed by IOI ($4.2 billion), Felda Global ($3.8 billion) and KLK ($2.9 billion). Meanwhile, KFC Holdings ($1 billion) engages in restaurant, and integrated poultry businesses. It operates a chain of KFC restaurants in Malaysia, Singapore, Brunei and India. Scorecard: 5
In the Philippines, San Miguel had revenues of $17.4 billion, but food and agribusiness pulled in only $4.4 billion. Another giant is Jollibee group ($2.4 billion), with over 2,000 multibrand outlets in the Philippines and overseas. It is followed by URC of the JG Summit group ($1.9 billion). URC has snack factories in China, Indonesia, Malaysia and Vietnam.
Del Monte Pacific, listed in Singapore and Manila, had $500 million in sales. However, its subsidiary, Del Monte Foods (USA) took in $3.6 billion.
Perhaps, the least known company but the most international is the Oishi/Liwayway group (over $500 million). It has 12 factories in China, two in Vietnam, one each in Indonesia and Burma (Myanmar) and three in the Philippines. The Oishi brand is stocked side-by-side with FritoLays (Pepsico) in convenience stories in China. Scorecard: 5
In Thailand, the largest group is the Charoen Pokphand (CP) group ($46 billion). It operates in the poultry, livestock and aquaculture value chains and runs over 5,000 7-Eleven franchises. CP’s affiliate, Chia Tai, runs some 100 feed mills all over China. CP agri-food revenues runs to over $25 billion.
Thai Beverage pulls in $5 billion while Thai Union Seafood $3.6 billion. The latter is the world’s largest canned tuna producer, has processing plants in Thailand, Indonesia, Vietnam and the US, and owns global brand, “Chicken of the Sea.” Asia’s largest sugar group is Mitr Pohl ($3 billion). STA Ltd. is the world’s largest integrated rubber processing company ($3.0 billion).
Betagro is in feeds and poultry ($2.1 billion). TRR Sugar Group ($1 billion) has seven refineries and ethanol plants. Up-and-coming is the Thai Vegetable Oil Company ($800 million). Scorecard: 8
Vietnam has the least number of billion-dollar players. They are dairy giant Vinamilk ($1.3 billion), beer maker Sabeco ($1.1 billion), and rice exporter Vinafood 2 (about $1 billion). Minh Phu Seafood is expanding ($500 million). Scorecard: 4
The list shows that the size of the export industry is driven by the size of the export companies. The scale of raw materials allows companies to grow and compete in the global market. Access to farmland and the size of domestic population help. But globalizing operations take more than that as shown by Singapore firms.
Many of these companies cannot thrive in a regime of low-productivity agriculture. In the Philippines, banana and pineapple companies are globally competitive because of high farm productivity and good supply chain management.
The Asean giants have grown from different platforms. Malaysia welcomed foreign companies, and later bought the iconic British companies like Sime Darby in the London stock exchange. Indonesia did, too, with liberal land leases. The Philippines welcomed the pineapple and banana multinationals. Thailand has been hospitable to local and foreign investments. Vietnam was government-led.
In the end, the common thread is the good environment for investors, be it local or foreign. After all, who creates jobs? It is principally private investments.
With so much idle private and public land, what needs to be done to make these become productive and job-creating? The poor need steady jobs. It is food for thought for Philippine society.
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To know more about taking advantage of the opportunities in an integrated Asean region, please attend the 12th MAP International CEO Conference 2014 this coming Sept. 9, Tuesday, from 7:00 a.m. to 5:00 p.m. at the Rizal Ballroom of the Makati Shangri-La. The conference’s theme reflects the top-of-the-mind issue today: “The Integration Momentum: Waves of Change, Oceans of Opportunity.”
The topics and speakers include the following: (1) Mr. Arin Jira (Thailand), chair of Map ta Phud Industrial Gas Co., Ltd, vice chair of the Federation of Thai Industries and chair of the Asean Business Advisory Council-Thailand, on “Gearing up for Primetime: Can the Ship Set Sail?”; (2) Bob Fletcher (Singapore), leader of Southeast Asia for Asia-Pacific Customs and Global Trade Practice of Deloitte, on “Customizin under the AEC: Surmounting the Barriers”; (3) Dato Ramesh Kodammal (Malaysia), managing director of Goldtex Exim Sdn. Bhd and member of Asean Business Advisory Council-Malaysia, on “Building SMEs and Working within Asean”; (4) Dr. Evan Sinar (USA), chief scientist and director of the Center for Analytics and Behavioral Research (Caber) and author of the Global Leadership Forecast of Development Dimensions International, Inc. (DDI), on “Global Leadership Forecast”; (5) Gil Genio (Philippines), COO for business and international markets and chief strategy officer of Globe Telecom Inc., on “Redesigning Organizations for Innovation”; (6) Tim Phillipps (Singapore), global leader of Deloitte Analytics and Deloitte Forensic, on “Analytics, Innovation, Technology, and Digital Connection as Key AEC Enablers”; and (7) Karyn Caplan (USA), chief development officer of Innovation: Africa, on “Social Innovation and the Business in Doing Good”.
For reservations or inquiries, please visit <www.mapceoconference.ph> or contact MAP via 751-1149 to 52, <map@map.org.ph> or <mapsecretariat@map.org.ph>.
( The author is chair of the MAP Agribusiness and Countryside Development Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific. Feedback at <map@map.org.ph> and < rdyster@gmail.com>. For previous articles, please visit <map.org.ph>)