Brunei Firms Need to Consolidate and Merge Abroad
BANDAR SERI BEGAWAN, Wednesday, November 26, 2014 - BRUNEIAN companies need to consider merging to expand their businesses and operate regionally by next year, said the regional editor of the Oxford Business Group (OBG), a global publishing, research and consultancy firm.
As ASEAN moves towards forming an integrated regional economy and single production base in 2015, Brunei should already focus on growing its companies to move abroad, Paulius Kuncinas (pic) told The Brunei Times.
“You have to encourage them to grow their revenues. Maybe consolidate, maybe you have companies merging and going together,” he said, following the launch of the firm’s annual publication The Report: Brunei Darussalam 2014 at an event held at the Prime Minister’s Office in the capital yesterday.
He said Brunei needs to trade more with its neighbours and this requires the private sector “stepping up” and going overseas.
“It has to start with the realisation of the private sector. Together they stand a better chance to compete overseas, so the catalyst has to be that recognition of opportunities,” said Kuncinas, adding that Brunei should realise the abundance of business opportunities abroad.
“I am not saying you have to necessarily move the operations from here to another city but you have to compete for business. And I think that it is simply a question of strategic tie-ups.”
The private sector should already realise the limited demand in the local market and the only answer to improving the economy is expand abroad, said Kuncinas.
“I know that this is not just in Brunei but across Asia, you have a dominant family member where it’s very difficult for founders to give up their sharues and do mergers and acquisitions because everyone wants to run the companies,” he said.
However, he cited the example of Thailand where family-owned companies have cross-shareholdings.
“They each hold some shares in each other’s companies and they basically try streamlining operations,” he said.
Bruneian companies which have limited human resources, may look into this option, said Kuncinas, suggesting that “it is much better to combine resources to have one platform when you are going overseas.”
He said Brunei is slowly recognising the need for its private sector to venture overseas.
Kuncinas lauded the government for developing various tools to teach companies how to deal with different legislations, establish efficient accounting systems, prepare effective marketing plans and build successful operations outside the country.
“But I think in 2015, we may actually have to start seeing actual results and first moves across (borders),” he said.
OBG’s The Report: Brunei Darussalam 2014, highlights the 10th National Development Plan, which is galvanising construction activity, as the government rolls out the infrastructure needed to broaden the country’ economic base.
The publication marked the culmination of more than six months of field research by a team of analysts from OBG.
It assesses trends and developments across the economy, including macroeconomics, infrastructure, banking and other sectoral developments.
The publication also delves into how Brunei plays its part in strengthening regional integration and improving connectivity among ASEAN member states.
The report includes a contribution from His Majesty the Sultan and Yang Di-Pertuan of Brunei, together with a detailed, sectoral guide for investors.
It also features interviews with political and business leaders including His Royal Highness Prince Hj Al-Muhtadee Billah, Crown Prince and Senior Minister at the Prime Minister’s Office; Minister of Finance II Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abdul Rahman Hj Ibrahim and Attorney-General Yang Berhomat Datin Seri Paduka Hajjah Hayati Pehin Orang Kaya Shahbandar Dato Seri Paduka Hj Mohd Salleh.
The Brunei Times