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From right ,Yoshihisa Kainuma, president and CEO of MinebeaMitsumi, Nicolo Galante, chief operating officer of Central Group, Thiraphong Chansiri president and CEO of Thai Union Group (Photo by Kosaku Mimura)

Facing risks in the West, ASEAN companies look homeward

Business leaders call for more integration to maximize the region's potential

BANGKOK -- Growing protectionist sentiment in the West and a volatile security situation in the Middle East have made Asia into a relative bright spot in an otherwise bleak global environment, according to participants in a business forum taking place in the Thai capital.

"It is very hard to find the bright spot in the global map," said Thiraphong Chansiri, president of Thai Union Group at the Asia300 Global Business Forum, an event sponsored by the Nikkei Asian Review.

In a panel discussion titled "Optimizing Management For Today's Global Challenges," Thiraphong said: "Growth is becoming secondary. How we can protect our profitability is becoming a chief [priority]."

Europe is increasingly inward-looking, led by the U.K., which is in the process of leaving the European Union, putting downward pressure on the British pound. That, in turn, has clouded the investment picture for Thai Union, the world's largest canned tuna producer. Thai Union has become one of Southeast Asia's most acquisitive companies, buying U.S. and European rivals in recent years as it tries to double its 2016 sales to $8 billion by 2020.

"The only bright spot to us is Asia," Thiraphong said, pointing to China as well as Cambodia, Laos, Myanmar and Vietnam.

Nicolo Galante, chief operating officer of Central Group.

Another speaker bullish on Asia was Nicolo Galante, chief operating officer of Central Group, a Thai retailing company that has purchased assets in Europe. "I think we are still one of the luckiest places in the world," he said.

Galante said that although China faces slowing growth, it, along with India, are still the chief drivers of the global expansion. "Thailand ... and [others in] Southeast Asia [are] perfectly placed in the middle of these two big growing economies in the world," he said.

On the trade front, the ASEAN Economic Community, which was formally established in 2015, needs greater integration to maximize its potential, said Yoshihisa Kainuma. Kainuma is CEO of MinebeaMitsumi, a Japanese manufacturer of machinery and electronic components that has extensive operations in Southeast Asia.

"Usually, industrial policy is not coordinated in other countries. That is a problem in the AEC -- nontariff barriers also," he said. He gave the example of having to change trucks at the Cambodian border when transporting products manufactured in Thailand as an example of unnecessary red tape.

Central Group's Galante also called for greater economic integration to enlarge the regional market and spur the development of domestic startups.

Bricks-and-mortar retailers like Central Group are being threatened by the rise of online competitors such as of U.S. and China's Alibaba Group Holding. "If we want our region to produce many more startups, the way [to do that] is to give them a big market," he said.

Still, companies are preparing for a time when they can again look to the West for growth. Thai Union, for example, has struck an agreement with environmental group Greenpeace to improve its labor and fishing practices, a move it hopes will allay concerns from Western consumers and investors critical of how the company operates.

"Our company's vision is to be the world's most trusted seafood leader, caring for our resources, caring for the next generations to come," Thiraphong said. "We believe that it is our responsibility, as one of the leading global seafood companies, to drive change in our industry. Especially, the area of our focus is on resource management and labor practices."

Nikkei staff writer Tsubasa Suruga contributed to this report

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