Business
S'pore CEOs on 2014: Cautious but optimistic
Chia Yan Min
The Straits Times
Publication Date : 06-01-2014
The road ahead is looking less bumpy as the global economy continues to recover, but corporate bosses say the coming year will not be all smooth sailing.
The fight for talent and rising business costs continue to be the main concerns for head honchos interviewed by The Straits Times, some of whom are also uncertain about prospects for the region's emerging economies.
The chief executive officer (CEO) of logistics firm YCH, Robert Yap, said last year was "a rather slow one for the logistics industry given the global manufacturing slowdown", but prospects are expected to improve.
"We expect to see a pick-up in 2014, which should usher in more opportunities brought about by rising Asian consumerism and the gradual maturation of regional trade blocs," he added.
There have been various efforts to increase integration in order to generate more regional trade, but growth is still being hindered by the uneven state of development in supply chain infrastructure and systems across countries in the region.
The lack of supply chain talent and leadership in Asia is another factor that is preventing the industry from making a rapid take-off.
Companies in the logistics sector are concerned about factors such as rising manufacturing costs, operational quality challenges and other practical issues in terms of business expansion in emerging markets such as China and India, noted Yap.
Tan Chong Meng, the group CEO of PSA International, said the industry is grappling with weak demand growth as well as an oversupply of shipping capacity - trends that are expected to continue this year.
"The imbalance created by weak trade growth and surplus shipping capacity will continue to pose a challenge for freight rates and will thus put a squeeze on profitability for container shipping lines," he added.
Maersk Line's CEO for the Asia-Pacific, Thomas Knudsen, said the company will continue to focus on growth markets in Southeast Asia such as Vietnam and Cambodia.
These markets are expanding fast because they are able to compete effectively in terms of manufacturing costs and are enjoying rising household wealth.
CapitaLand president and group CEO Lim Ming Yan said the property cooling measures imposed recently in Singapore are expected to continue having a moderating effect on the private residential market this year.
However, he noted, "the outlook for demand in terms of new homes and offices remains positive over the long term, given a resilient Singapore economy and population growth".
He said the company expects to focus on its large-scale integrated development projects in China this year.
Religare Health Trust CEO Gurpreet Dhillon is optimistic about prospects for the health-care sector in India, where all of its assets are located.
Even though the volatility of the Indian rupee will be a challenge, there are strong fundamentals driving growth in the sector.
"The market continues to benefit from attractive demographics and socioeconomic changes as well as a huge demand-supply gap," said Dhillon.
The CEO of the Singapore Business Federation (SBF), Ho Meng Kit, said the results of its National Business Survey show that members are more confident about their prospects in the coming year.
"This greater business optimism can be attributed to further stabilisation of the global macroeconomic environment, as well as momentum building up from stronger-than-expected growth last year," he said.
Nonetheless, concerns about rising domestic business costs are expected to persist this year.
The construction, retail and food and beverage industries have been disproportionately affected by economic restructuring, Ho noted.