960415

Asean sales potential

most attractive to

Japanese companies

TOKYO: Access to local markets was

the major driving force behind Japanese companies relocating to

the Asean region, according to the findings of a trade

survey released on Monday.

The Japan Extrenal Trade Organisation (Jetro) said 34.5

percent of Japanese companies replying to its survey,

conducted between December and January, found sales in local markets

more an incentive than exports from those bases.

The survey covered 977 Japanese-affiliated manufacturers

operating in five countries in the Association of Southeast

Asian Nations (ASEAN). Those countries were Indonesia,

Malaysia, the Philippines, Singapore and Thailand. Not covered

were Brunei and Vietnam.

Jetro said that in Malaysia, which has a large number

of electronic and electrical equipment parts makers, the

second-most common reason -- 24.2 percent of respondents -- for

setting up there was to meet the needs of locally-based

Japanese assemblers.

The survey also found that makers of electronic and

electrical parts represented the largest group

of Japanese-affiliated manufacturers, or 24.3 percent. There was

a growing number of metal products makers due to the increased

presence of small- and medium-sized parts manufacturers in the

five Asean mewmbers.

Indonesia has attracted the largest share, or 31.7

percent, of Japanese-affiliated companies to relocate since

the yen's appreciation in 1985.

Profitable operations were enjoyed by an overall 68

percent of affiliated manufacturers, 71 percent for those

operating before 1990, Jetro said.

But local shortages of management-class personnel saw

salaries of section managers rise by double digits from the previous

year in Malaysia, Singapore and Thailand, while factory workers

in Thailand and Malaysia saw their salaries rise relatively

fast, Jetro said.

Labour problems and rsing wages were top of the

list of business-related difficulties, except in Indonesia, where

the main problems were considered to be complex

administrative procedures and tariff and customs procedures.

Firms that planned to shift production bases to third

countries rose from 17.6 percent in the previous survey to

31.0 percent. Asean scored 49.4 percent as the preferred target,

followed by China with 25.3 percent, Indochina and Burma with

9.5 percent, and India 1.3 percent.-AFP