'Different countries develop different expertise aligned to the nature of their market, their history and skills,' said the BASF spokeswoman. 'Indonesia also has a long history in the coatings raw material supply business, and has established a strong track record in serving the rapidly developing coatings industry in the ASEAN region.' One challenge is the different business environments with which indigenous staff are familiar. 'I think it's a sensible idea to recruit local talent but they can need a bit of development,' added Mr Laidler. 'Our experience of the Chinese education system is that while it produces graduates who are extremely well qualified and highly motivated, they tend to lack the will to constructively challenge, which we regard as key. 'We've found that taking them for initial training in our global laboratories brings them on a hell of a lick and they get to know the rest of our research community and start their own networks.'
A key complaint by local paint companies is that multinationals can act as a brain drain, poaching local high-flyers with the lure of higher salaries, while competing on quality and cost for products through economies of scale. They can also penetrate a wide range of markets, creating an enduring presence, and a subsequent public perception of competence. 'The strengths of these companies are that they are present in various coating segments such as decorative as well as industrial,' said Ms Choong. A number of multinationals, such as AkzoNobel and Nippon Paint, also have a range of third tier products to compete with lower cost products.
'Does the presence of hubs have any negative impacts on the local paint industry? Of course it does,' said Mrs Eason, of the Thai Paint Manufacturers Association. 'They can create problems. There is an issue with taking talent--they can often offer higher salaries. You will also find that a Japanese automotive company will only use a Japanese paint. But it can vary--sometimes companies are not in direct competition.'
Local companies must also compete with public perception in the region, which retains a tendency to assume that some Western goods are likely to be more reliable. 'Multinational companies pose a major threat to the local companies as Asians would prefer branded goods that come at a comparable price,' said Ms Choong. 'They believe that branded products equal a guaranteed high quality product. Most of the branded products are produced by MNC companies who [which] offer after service sales to the customer if there are any defects or complaints about the product quality.'
In the Philippines, local manufacturers believe the issue is less controversial. 'The presence of multinational companies is relatively small and they do not pose a big threat to our local industry players,' said Mr Cheng. 'But yes, it is possible for them to poach local talent. That is why we are doing our best to strengthen and increase our talent base by way of proper education.'
However, labour can flow both ways Mr Laidler points out. 'It's a seller's market and there's mobility among well qualified graduates. They are moving from job to job and company to company and they'll quite often get close to doubling their salary in doing so. Retention of good staff is criitical. You can address it by giving them career, professional and technical development benefits.'
BASF also rejects accusations that multinationals have a malign influence on local markets. 'There are many cases where we can combine the strengths of local and multinational set-ups to pursue a win-win situation. A notable example is with Eason Paint in Thailand [BASF's motorcycle coatings in Thailand are exclusively produced by Eason Paint],' said a spokeswoman. 'We consider ourselves a member of the local community--in Cengkareng we have a history of nearly 20 years. We employ local personnel and management, work with many local suppliers, and establish local production.'