If Association of Southeast Asian Nations (Asean) were a single entity, it would rank as the eighth-largest economy in the world!

Spanning an area of 4,435,674 square kilometers, Asean is home to more than 604 million people, representing 8.8 percent of the world’s population. Together, the member-nations, Brunei Darussalam, Cambodia, Lao PDR, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, formulated Asean Vision 2020, envisioning a strong and interconnected Asean living in peace, stability and prosperity. However, to make this vision a reality, Asean knows that it has to create a stable, progressive, and highly competitive Asean Economic Region.

In 2003, guided by the Asean Vision 2020, the Asean leadership sought to establish an Asean Economic Community (AEC) by year 2020, the objective being to transform this body into a competitive single marketplace and production base that would facilitate the free flow of trade in goods and services within the region, and with it, the mobility of investment, capital and skilled labor. In turn, this was foreseen as being essential to the integration of Asean into the global economy.

In 2007 Asean boldly decided to advance the full implementation of the programs, measures and principles of the AEC to 2015.

Expected benefits from AEC 2015

THE benefits of AEC 2015 are many. For the member-nations, AEC is expected to make Asean an attractive investment destination, and to enhance trade within and beyond Asean, generating more jobs in the process. As it obtains more credibility as a dynamic economic block, Asean stands to gain more recognition and support from the rest of the world. For business, AEC 2015 will open new markets and channels of distribution, create more opportunities for intra-Asean sourcing of goods and raw materials, stimulate expansion of production capacities and thus generate efficiencies. Perhaps most important, for consumers, AEC 2015 will mean more choice.

Just as there will be benefits, there will also be significant challenges that must be addressed. Among these will be the need to harmonize regulatory frameworks and standards among member-nations, and the alignment of these with international norms. This will be essential to the facilitation of the free flow of goods and will require a new level of cooperation and transparency among Asean countries.

The role of the private sector

For the food-and-beverage industry, the advent of AEC 2015 represents an important milestone, representing as it does the opportunity to serve consumers across a region which is rightly recognized as one of the true powerhouses of this century. The seven priorities that the AEC has set highlight the important role that industry has in supporting governments in the realization of their shared vision. These priorities are:

Strengthening food security;

Facilitating trade in agriculture and forestry products;

Generating and transferring technology to increase productivity and develop agribusiness;

Developing rural communities and human resources;

Involving and investing in the private sector;

Managing and conserving natural resources for sustainable development; and,

Strengthening Asean cooperation in addressing regional and international issues;

Nestlé fully supports these aims and indeed they align closely with the principles of Creating Shared Value (CSV) which lie at the heart of our business model. The essence of CSV is the understanding that business can only thrive if the community within which it operates also benefits. In the case of Nestlé, those benefits are identified as improving the nutrition, health and wellness of the consumers who we serve, contributing to rural development where many of our factories are located and husbanding that most valuable of resources, water.

Nestlé has been present in the Philippines and Malaysia for over 100 years, while in other Asean member-states the company’s brands have been marketed for almost as many years. The company has extensive manufacturing facilities throughout the region with six of these being located in the Philippines, the latest of which is the P5-billion plant in Tanauan, Batangas, which was commissioned in October 2012. Such is the potential of this economic region that local investment will continue to play an important role in the expansion of the business. AEC 2015 will bring the added benefit of greater export opportunities within the newly created economic community.

The further opening up of the market will not only bring greater choice for consumers but it will also lead to increased competition and more rapid growth in important food and beverage markets, all of which is to be welcomed. The winners in this exciting new world will be those companies that truly understand and appreciate their consumers and customers, and meet their growing needs for innovative new products and value for money.

The Philippines is in a uniquely strong position to benefit for the closer integration of the Asean market. Under the current administration, the country is witnessing strong economic growth and this, allied with a larger domestic market and a vast pool of talented young people, will make the country a highly attractive destination for investment and also a burgeoning consumer goods market. Whether you are a long-established player or an enterprise looking for new opportunities to expand, 2015 is an important date in the strategic agenda of fast-moving consumer goods companies, and there is no better place to be than the Philippines. We look forward to contributing to this exciting new chapter in the Asean story.

John Martin Miller is the chairman and CEO of Nestlé Philippines Inc. He is a board member of the European Chamber of Commerce of the Philippines.

Source: Business Mirror; Asian Economic Community; 22 May 2013