Asia’s increasing economic clout — backed by population growth and a burgeoning middle class — is forcing changes to the Western-led global corporate order.
Late last year, the mayor of a city in suburban Belgrade, Serbia, gave an enthusiastic welcome to a delegation from Indonesia, thanking the Salim group for deciding to build an instant-noodle plant there.
The plant is for the Indomie brand of noodles, which are made by a company belonging to Salim, the Southeast Asian country’s biggest conglomerate. The brand is synonymous with instant noodles in the Middle East and Africa, where it is the market leader.
Europe and Asia have been duking it out for supremacy on the Balkan Peninsula, home to Serbia. Salim is hoping the noodle plant will boost its business in Europe. It will also help create jobs in a country struggling with an unemployment rate of more than 20% and a shrinking economy.
Salim’s decision reflects Indonesia’s solid 6% economic growth and symbolizes the country’s increasingly robust presence in a Europe that is running short of breath.
Age of two oceans
Europe is not the only market where Indonesian companies are strutting their stuff. For example, Kalbe Farma, Indonesia’s largest pharmaceutical company, has begun producing over-the-counter drugs in Lagos, Nigeria’s biggest city, with an eye toward expanding sales in South Africa and Zimbabwe.
This overseas push comes against the backdrop of a fast-growing Indonesian middle class and forecasts that the country’s overall population will swell to 300 million in the 2030s from the current 240 million. Companies that have grown by capitalizing on the increase in middle-income consumers are venturing beyond the region to tap new markets.
Akihiko Tanaka, president of the Japan International Cooperation Agency, said the first quarter of the 21st century is moving toward the “age of two oceans” — the Pacific and the Indian Ocean, the latter of which encompasses high-growth countries stretching from Southeast Asia to India to Africa.
Highlighting the tremendous growth occurring in this region is the plan by Philippine retailer SM group to add 25 new shopping malls over the next five years to its retail chain, which in the past three decades has grown into the country’s biggest. This means the company will, essentially in a single stroke, boost its network by 50%.
