One reason for the emphasis on CCUS is that there are unique values in CCUS that are difficult to achieve it with other CO2 reduction methods. Specifically, according to the IEA, there are mainly four strategic values of CCUS:
Most of the current CCS development projects in operation are mainly in Europe and the U.S., whereas in Southeast Asia region, there are no commercialized CCS projects that are in operation phase at present. Major reason for this situation is that the legal system related to CCS is still underdeveloped in Southeast Asia, while Europe and the U.S. have incentivized initiatives such as the Emission Trading System and Tax Credit (45Q). As a result, it is difficult for project developers to invest in PJ development because they have no prospect of its profitability at this point. 
Japanese government and companies have started to promote the development of CCS projects in Southeast Asia against this high potential. For example, in the Gundhi CCS Project in Indonesia, JGC HOLDINGS CORPORATION and Electric Power Development Co., Ltd. are collaborating with Pertamina and the Bandung Institute of Technology to develop the first large-scale CCS project in ASEAN, and the number of similar projects is expected to increase in the future. 
Mr. Tatsushi Sasakura is a Senior Manager of IGPI Singapore. Tatsushi has worked in Mizuho Bank and Deloitte Tohmatsu Financial Advisory (DTFA) in Japan. At DTFA, he belonged to the Corporate Strategy team specializing in business strategy planning, M&A advisory, and business due diligence. He was also engaged in crisis management, supporting clients to tackle emergencies. He has profound experience in the energy, consumer, and financial industries. He covered a wide range of clients including Private Equity Funds and large-sized companies. Tatsushi graduated from Waseda University with a B.A. in International Political Science and Economy.
| Period of announcement | Key regulations | Issuer | Summarised key content on the regulation |
| September 2022 | Personal Data Protection Law Bill (to be soon enacted as Law) | House of representative – which will become Law once it is ratified by the President | The Personal Data Protection (“PDP”) Law will be the first comprehensive law in Indonesia to govern personal data protection in both electronic systems and non-electronic systems. |
| September 2022 | Acceleration of Renewable Energy Development for Electric Supply (“PR 112/2022“) | President of Indonesia | To accelerate the usage of renewable energy as an energy source as well as reducing greenhouse gas emission (“GHG“). restriction of operational period for steam power plants, limitation of new steam power plants construction, obligation to use local components in order to implement Electric Supply Business Plan by PT Perusahaan Listrik Negara (“PLN“), pricing of electricity based on a renewable source, electricity procurement, and many other provisions. |
| October 2021 | Harmonisation of Tax Regulations (“Law 7/2021”) | Government of Republic of Indonesia | Several tax provisions in Indonesia which had previously been regulated in separate regulations are now being amended simultaneously. Some of these regulations are Law on General Provisions and Tax Procedures (General Provisions of Taxation Law), Law on Income Tax (Income Tax Law), Law on Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (VAT and Luxury Goods Sales Tax Law), Law on Excise (Excise Law), and other tax regulations issued during the Covid-19 Pandemic. |
| March 2021 | Risk-Based Business Licensing Concept as part of the implementation law of Omnibus Law (“GR 5/2021“) | Government of Republic of Indonesia | Business licensing is the legality which is granted to business actors to start and run their business and/or business activities,1 and risk is the potential loss caused by hazards.2 Thus, risk-based business licensing is a business licence based on the risk level of such business (“Risk-Based Business Licensing”). The implementation of Risk-Based Business Licensing is aimed to improve the investment ecosystem and business activities, through4: a. the implementation of the issuance of business licences is more effective and simpler; and b. transparency, structured, and accountable supervision of business activities in accordance with provisions of laws and regulations. |
| March 2021 | Investment Line of Business – as part of the implementation law under the Omnibus Law (“PR 10/2021“) | President of Indonesia | Offers ease of investment through amendment regarding the lists of lines of businesses that are open to investment, lines of business that are closed to investment, and lines of businesses that shall be carried out only by the central government |
For example, say you, an overseas investor operating in the mining services business, are looking to acquire a coal mining Operating Company that also owns a coal mining licence in East Sumatera. This exercise itself can be quite broad and complex, but as a start, you have to look into the latest regulation aspects governing your acquisition – including whether the transaction is allowed under positive investment list and to also understand the various steps needed to complete your transaction, including having it approved by the Ministry of Law and Human Rights, the BKPM and if necessary the anti-trust regulatory commissioner (or also known as Komisi Pengawas Persaingan Usaha or KPPU). You will also need to understand the latest regulations governing coal mining operations and ownership as this is governed by the ESDM – specifically, there is a foreign ownership restriction on the company that owns the coal mining licence, and the need to follow rules on how to transfer such mining business licences in the event there is a change of ownership. At times, the government through ESDM may also issue temporary restrictions on certain business activities for example, on the export of coals, which happened in early 2022[2]. The target’s mining company operation may also be subject to the local provincial government – for example in the case of Tanjung Enim (an area known for Coal mining) there have been provincial rules (also known as Peraturan Daerah or “perda”) issued to govern the coal mining operations within that precinct[3]. In addition to all these, aspects pertaining to tax, environmental, labour, trade (including any ban of exports/ imports on coal-related commodities) and real estate law (esp. on land ownership) have to also be considered in your transactions. The framework that we outlined above is to help you to have an overview of the regulatory framework that is applicable in Indonesia. This helps to at least provide a basic concept and an early guideline in performing M&A transactions. Besides the framework above, below are also additional tips we believe would be important to consider when you are looking to perform M&A in Indonesia:1. Understand the basic nature and mechanics of Indonesian limited liability company regulations Gaining an understanding of the mechanics behind the Indonesian Limited Liability Company is your key first step to navigate this complexity. You may start by gaining an understanding of the Indonesia Standard Industrial Classification (or formally known as Klasifikasi Buku Lapangan Indonesia (KBLI)) and the various licences needed to operate certain businesses (or also known as Surat Izin Usaha Perdagangan (SIUP)). Beyond that, it is also important to understand the basic structure of Indonesia Limited Liability Company as coded by Law No.40 of 2007 (Company Law) as amended by Law No.11 of 2020 of Omnibus Law and Law No.25 of 2007 on Capital Investment (Investment Law), which governs the basic legal framework of investing into the country.
2. Go to the source and have your local Indonesian team vet through the regulations When in doubt, you should always go back to the source and not just rely on the interpretation of the law itself (or as reviewed/ commented by many legal advisors). Where necessary, it is definitely very important to have your Indonesian team members or representatives look into the original regulations as issued by the official source.
3. Seek advice from government investment services It is always important to get advice from not only your legal key person but also from government investment services and relevant trade associations. This is probably the only time that getting multiple pieces of advice from various sources is an efficient way to do business in the context of performing M&A in Indonesia, as a simple wrong step may cause a significant setback. Hence, other than getting reliable advice from your trusted legal advisor, it may also be necessary to contact the investment service department of the Investment Coordination Board (BKPM) OR your contacts in the relevant trade associations.
4. Always keep yourself updated and aware that many regulations are not always permanent In the example above, there was a ban imposed on the exports of coal – but this was only ephemeral – at the end of January 2022, which is just a few days from when the ban was announced, these regulations have been updated and there is no longer a ban imposed on such exports. This is to show that rules do change frequently.
At IGPI, we believe that it is very important to understand the local regulatory customs governing your business needs. We hope that the legal framework and advice above would be of great assistance when you explore M&A in Indonesia. Feel free to reach out to our M&A advisory team for any further discussion. **************************************************************************************************** [1] https://www.tmf-group.com/en/news-insights/publications/2022/global-business-complexity-index/ [2] https://www.esdm.go.id/en/media-center/news-archives/preventing-power-outages-govt-temporarily-bans-coal-export [3] The various provincial rules issued pertaining to PT Tambang Batu Bara Bukit Asam (Persero) Tbnk at Tanjung ENIM ****************************************************************************************************
Mr. Erwin Thio is the Senior Manager of IGPI Singapore. Before joining IGPI, Erwin was part of KPMG Corporate Finance team in Indonesia, where he led various cross-border transactions, working with both local/ regional and global players. He also acted as engagement lead for a handful of Corporate Finance strategy/ advisory engagements for Indonesian state-owned enterprises, including an engagement for a major strategic national project, a government-to-government cooperation between a consortium of Indonesia state-owned enterprises and a consortium of leading Chinese corporations. Erwin’s areas of expertise are in M&A deal management (both buy-side and sell-side), deal structuring, valuation and commercial due diligence, market analysis, and project management. He has also spent a number of years working within the investment and fund management (particularly for Real Estate Private Equity Funds) division of major developers such as Mapletree, Lendlease, Savills IM, and CFLD, where he helped with deal execution and origination, capital raising, fund creation/ development, and management. Erwin graduated with a Bachelor of Business Management from Singapore Management University with a Major in Finance and he is also a CFA Charterholder. 
Why are suburban coffee shops trading at such high prices? We believe there are two main reasons. The first reason is the limited number of outlets available for trading in the first place. There are about 2,200 coffee shops and similar eateries in Singapore, and about 770, equivalent to one-third, are set up by HDB on the ground floors of HDBs out of which 400 of these are sold to private companies and individuals in the early 1990s. In 1998, NEA has stopped selling them and switched to renting the owned coffee shops to private companies and individuals. In other words, only 400 coffee shops that are set up in public housing can be transacted. The second reason is that the coffee shops in Tampines and Yishun, which were sold at a historical high price, are large and scarce. The two coffee shops have 18 and 14 stalls of small-scale restaurant space, respectively, and are expected to attract a more significant number of customers as they can develop a wider variety of restaurants than many coffee shops, which typically have less than 10 plots. However, the sale and purchase of coffee shops at high prices risk becoming a social problem in the form of increased rents borne by the tenants, small restaurants, which subsequently are passed on to consumers through increased food prices resulting in a larger burden on the household budget for consumers. In this context, National Development Minister Desmond Lee, in his parliamentary reply in July 2022, emphasised that an average of 15 coffee shop transactions in public housing have occurred every year since 2010, but that 70% of these transactions are for less than S$10 million (approximately JPY 970 million), with limited impact on household finances. 
Looking further at food by detailed category, it can be seen that the average monthly household expenditure of S$437(approximately JPY 42,000) per month on categories in addition to coffee shops, including hawker centres and food courts is higher than food and non-alcoholic beverages (S$389) and restaurants, cafés and pubs (S$296) (Figure 3). 
The fact that more was spent on coffee shops and hawker centres than on food and non-alcoholic beverages suggests that eating out or taking food away from home is more common in Singaporeans’ lives than cooking for themselves. Furthermore, looking at average monthly household expenditure by income quintile in the three food service categories, including fast food, it shows that the largest expenditure is on coffee shops and hawker centres, except for the highest income quintile with an average monthly household income of S$10,070 (approximately JPY980,000) (Figure 4). It is often believed that the main customers of coffee shops and hawker centres are low-income households, but in reality, coffee shops and hawker centres are almost like a ‘second kitchen’ for many Singaporeans, who use them daily.
These food and beverage purchasing behaviours by Singaporeans will continue to grow as a result of new behaviours stemming from the outbreak of COVID-19, namely the increasing use of coffee shops adjacent to suburban HDB rather than restaurants in office blocks due to the spread of work-from-home. In fact, 30 new coffee shops are expected to be built in council housing over the next four years. A comparison of the performance of typical food service companies in COVID-19 also provides a glimpse of the reality of the assumed impact of changing consumer purchasing behaviour. Among the major food service companies listed on the Singapore Exchange (SGX), Kimly Group, which operates a total of 136 multi-brand outlets with 84 coffee shops (as of October 2021), and JUMBO Seafood, which is famous for its seafood dishes, operates total 42 restaurants under 12 restaurant brands. Looking at the sales figures for the first half of the year (ending September) over the past three years, using the example of the JUMBO Group, which operates domestically and internationally, it is possible to understand the strong performance of the Kimly Group (Figure 5). Moreover, the JUMBO Group, which has mainly targeted tourists and business customers, has announced plans to acquire a 75% stake of the shop “國記雲吞麺” in the hawker centre for S$2.1 million (approximately JPY 200 million) in November 2020 under COVID-19 and to open multiple outlets both domestically and internationally. As of August 2022, “國記雲吞麺” has expanded to eight outlets, mainly in coffee shops in Singapore, and this is an excellent example of large food and beverage companies, which until now have mainly opened outlets in street shops and shopping malls, accelerating the opening of outlets in hawker centres and coffee shops based on changes in the business environment and consumers’ purchasing behaviour. 
The fourth is to focus on digital marketing activities using social media such as Facebook and Instagram. In particular, Generation Z, born between 1996 and 2015, are also known as “digital natives” as they were born in an age where digital is commonplace, and it is not uncommon for them to decide what to eat and where to eat based on information obtained from social media. Therefore, it is essential to develop menus that stick with Generation Z while simultaneously providing effective promotional information on social media, which they are in contact with at all hours of the day. The fifth is to ensure thorough cleaning of the coffee shops, including tables, chairs and toilets as well. In order to prevent losing consumers who are unhappy with the cleanliness. Overall cleanliness of a coffee shop is an important factor that consumers subconsciously evaluate along with other factors such as the taste and price of food and beverages. 
Mr. Ryota Yamazaki is the Director of IGPI Singapore. Before joining IGPI, Ryota worked in Deloitte Consulting in Singapore, where he was a leader in the areas of Consumer Business and Supply Chain & Logistics in Southeast Asia. His areas of expertise are Strategy & Operations, such as market entry, Route-to-Market (RTM) strategy, business due diligence, and PMI. He started his career with A.P. Moller-Maersk Group as a management trainee and also worked for Kurt Salmon, where he had vast project experience, especially in Supply Chain & Logistics for the retail and consumer goods clients. Ryota graduated from the Faculty of Economics at Keio University.
There are many industries that are not suitable for countries with low population density. Cell phone base stations, EV charging facilities, retail chains, and public transportation are some examples of extremely inefficient investments when population density is low. In Australia, there are existing policies to ensure minimal unsound or unnecessary investments or operations in these areas.
For example, only Sydney and Brisbane have train services from the international airport to the city center, while other airports offer cab or bus services. In addition, many gas stations are unmanned, and retail stores are closed at times of the day when customer traffic is low.
In Australia, a number of technologies have been developed to support low population density. For example, there are innovative technologies to support the operation of gyms that are open 24 /7 or to automate agriculture. Among these, a company that provides IoT technology called Myriota is attracting particular attention. Starting as a spin-off venture from the University of South Australia in 2015, the company aims to build a large-scale, low-cost, low-power consumption satellite communications network using nano-satellites. Its technology is currently being used in a wide range of applications, from monitoring wind farms to water tanks on farms.
It has raised more than A$50 million in funding to date, and investors include Innov8, a Singapore-based venture capital firm run by SingTel, one of Asia’s largest telecommunications companies, and HorizonX, Boeing’s venture capital arm.
A key factor in creating new industries in Australia is the federal government’s management of industry portfolios and state governments’ focus on specific industries. For new industries, startups in each state’s region focus on a specific business area, such as FinTech in New South Wales, AgriTech and HealthTech in Victoria, and CleanTech and SpaceTech in South Australia.
Moreover, each state governor has made efforts to develop their cities to maximize the growth of the industries they are focusing on. For example, in South Australia, the incubation hub Stone & Chalk is located within walking distance of the University of South Australia, the University of Adelaide, and research institutes. Myriota, introduced in 2) above, is also a university startup born in such an environment.
In the past, excessive population growth was considered a social issue in Japan – today, the paradigm has shifted and key challenges include a declining population due to the falling birthrate and aging population, as well as depopulation of regional cities. Instead of viewing environmental change as a risk, let us acquire and apply the skill of analogical thinking to find reference cases that will help us solve our current problems. Looking across the world, there is an abundance of solutions and resources that we can and should tap on. **************************************************************************************************** IGPI can provide strategy consulting for multiple aspects of your business. Get in touch with us on internationalization, strategic planning and fund raising related topics!
Kohki Sakata is CEO of IGPI Singapore. After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation, where he managed projects on global expansion and turnaround in various sectors, including F&B, healthcare, retail, IT, etc. After joining IGPI, Kohki has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that have been developed in Western countries, he has developed multiple methods to turnaround Asian companies with a focus on setting a clear vision and employee empowerment. He has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management. He graduated from Waseda University Department of Political Science and Economics and IE Business School. 
Mr. Ryota Yamazaki is the Director of IGPI Singapore. Before joining IGPI, Ryota worked in Deloitte Consulting in Singapore, where he was a leader in the areas of Consumer Business and Supply Chain & Logistics in Southeast Asia. His areas of expertise are Strategy & Operations, such as market entry, Route-to-Market (RTM) strategy, business due diligence, and PMI. He started his career with A.P. Moller-Maersk Group as a management trainee and also worked for Kurt Salmon, where he had vast project experience, especially in Supply Chain & Logistics for the retail and consumer goods clients. Ryota graduated from the Faculty of Economics at Keio University.
Mr. Zhi Hao Thean is an Analyst in IGPI Singapore. Zhi Hao started his career with IGPI. He graduated from Singapore Management University with a Bachelor of Business Management, majoring in Finance. During his penultimate year, Zhi Hao embarked on an internship in Corporate Advisory, where he was engaged in M&A, financial due diligence, and valuation projects across various industries. He also worked as a Research Assistant at SMU, where he performed academic research on real estate investment trusts. Zhi Hao is proficient in English and Mandarin. He enjoys keeping up with the latest developments in consumer technology such as smartwatches and mobile operating systems in his free time.
Industrial Growth Platform Inc. (IGPI) is a premier Japanese business consulting firm with a presence and coverage across Asian markets. IGPI was established by former members of the Industrial Revitalization Corporation of Japan (IRCJ) in 2007. IRCJ, a US $100 billion Japanese sovereign wealth fund, is known as one of the most successful turn-around funds supported by the Japanese government. In 2017, IGPI collaborated with Japan Bank for International Cooperation (JBIC) to form JBIC IG, providing investment advisory services and supporting overseas investment. In 2019, JBIC along with BaltCap jointly established Nordic Ninja, a €100 million venture capital fund to focus on deep tech sectors such as autonomous mobility, digital health, AR/VR/MR, artificial intelligence, robotics and IoT in the Nordic and Baltic region. In 2019, IGPI established IGPI Technology to focus on the area of science and technology. The company invests in technological ventures and provides hands-on management support. The company also provides business development support for the commercialisation and monetization of technologies. IGPI Australia is a branch office of IGPI Singapore. The latter, which was established in 2013, focuses on management consulting and M&A advisory in Southeast Asia across various sectors. We act as a bridge between Japan and wider APAC, having advised on market entry strategy, potential target search, valuation, due diligence, M&A process management, post-merger integration and change management for leading Japanese clients. In addition, we have helped businesses in Southeast Asia enter Japan and acted as sell-side advisors for SMEs and private equity funds looking to divest. IGPI Australia was established in 2020 with a dual focus of helping Australian businesses enter and grow in ASEAN / Japan and attracting Japanese investments into Australia. We have since successfully helped to connect multiple Australian businesses with Japanese businesses within IGPI’s network.
In ASEAN, along with the urbanization, in which more and more people gather in cities, the ratio of the middle class is increasing in many countries, promoting economic development in the area. In many ASEAN countries, the ratio of middle-class or higher households is more than 50% nowadays. It is even expected that not only the middle class but also the wealthy class will increase in the future (see Figure2[2], 3[3]). 
Furthermore, in ASEAN, the penetration rate of smartphones is increasing more rapidly than in developed countries such as Japan, and people in ASEAN use smartphones much more frequently and longer a day compared to people in Japan. As a result, the leapfrogging (accelerating development by skipping inferior, less efficient, more expensive or more polluting technologies and industries, and moving directly to more advanced ones) has also occurred, and the business environment has changed significantly (see Figure 4[4]). 
The rapid changes mentioned above have given not only opportunities in the growing market, but also opportunities from the rising demand for solutions to various social issues such as traffic congestion, medical shortages, and lack of service quality. However, amid such rapid changes, the ability related to exploration is required more than before. It mainly consists of the creativity to make a new business concept through careful observation of the site, and the agility to repeat the planning and verification of new business hypotheses at high speed. In response to these changes, emerging digital and tech companies such as Grab and Go To (Gojek & Tokopedia) are achieving continuous transformation and growth while developing new businesses one after another through quick top-down decision making, etc in Singapore and other countries in Southeast Asia. 
The first is to form and operate an autonomous and cross-functional local team. If the headquarters empower the local team and it can engage in various activities related to creating new business autonomously by itself, the agility of the team will be improved. In addition, by increasing the diversity of the organization (adding members with various backgrounds to the team), it is possible to easily conceptualize business plans from a new perspective, and even if they encounter problems, they will be able to come up with the ideas of solutions from various angles. The other is for the group CEO to commit to ensure that such a local team is formed and operated properly. Since the nature of exploitation of existing businesses and exploration for new businesses are different, there are often conflicts in terms of resources, etc., and it is often required that the CEO take the initiative in providing support to the local team. Then, what should be done to realize the formation and operation of an autonomous and cross-functional local team? There are eight key factors (see Figure 6). 
Jongwoo has worked in ABeam Consulting Ltd, where he engaged in various consulting projects including the development of business plans, creating go-to-market strategy, and hands-on support in several B2B industries such as energy, automotive, ve, IT, etc. He not only develops strategy but also supports clients’ execution of the plan, such as searching for strategic alliance partners and approaching them. He started his career as an auditor in KPMG Japan, leading an audit team for foreign investment banks, and also provided regulation-related advisory services to Japanese financial institutions. He has a bachelor’s degree in economics from the University of Tokyo. Industrial Growth Platform Inc. (IGPI) is a premium Japanese management consulting and M&A advisory firm headquartered in Tokyo with offices in Singapore, Hanoi, Shanghai, and Melbourne. IGPI has 14 institutional investors, including prominent Japanese mega-corporations such as Nomura Holdings, SMBC, KDDI, Recruit, and Sumitomo Corporation to name a few. IGPI has vast experience in supporting Fortune 500s, Govt. agencies, universities, SMEs, and startups across Asia and beyond for their strategic business needs such as market entry and digital transformation and growth strategies, various aspects of M&A, innovation advisory, new business creation, etc. IGPI is consciously an industry agnostic firm (work in 10+ industries) and this coupled with its making its venture investments (30+ till date) adds to its uniqueness. IGPI has a JV with the Japan Bank of International Cooperation (JBIC) – one of JV’s initiatives is a VC fund in Europe (EUR 100mn fund) with participation from Honda, Panasonic, and Omron. Get in touch with us on internationalization, strategic planning, and fundraising-related topics! This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness, and accuracy of such information. All rights reserved by IGPI.
The lifecycle of introduction, growth, maturity, and decline is easy to understand if we compare it to the life of a human being. Naturally, infants and adults, as well as the young and old have different values and use money differently. In the case of business, our way of looking at sales and profits should also be different, as shown in the figure below.
This is also similar to the life of a human being. Initially, there is no income earned during our childhood and money is continuously spent on necessities such as food, education, etc. However, we can think of this as an “investment for the future” rather than a mere expense. As we grow up, our expenses increase while income rises and as we move from middle age to old age, our investments for the future decrease and our priority shifts to how to control expenses while being conscious of saving sufficient money. In business, the number of competitors also change over the different phases of the lifecycle. This number, which was small in the introduction phase, increases rapidly in the growth phase, decreases again in the maturity phase and decline phase due to weeding out and eventually is reduced to a few companies through acquisitions and mergers. This is what happens in every industry. Kohki Sakata is CEO of IGPI Singapore. After joining Cap Gemini and Coca Cola, Kohki joined Revamp Corporation, where he managed projects on global expansion and turnaround in various sectors, including F&B, healthcare, retail, IT, etc. After joining IGPI, Kohki has managed projects mainly on global expansion and cross border M&A in various sectors such as logistics, IT, telecom, retail, etc. In addition to his broad experience in implementing solutions that have been developed in Western countries, he has developed multiple methods to turnaround Asian companies with a focus on setting a clear vision and employee empowerment. He has proven the practicality of these methods by turning around Asian companies not only as an advisor but also as senior management. He graduated from Waseda University Department of Political Science and Economics and IE Business School.
SUNRICE – One of Australia’s leading food exporters with 30 brands in 50 countries About the company : One of the largest rice food companies in the world and one of Australia’s leading branded food exporters Mode of entry : In 2018, SunRice accomplished the acquisition of a rice processing mill in Dong Thap Province to establish a fully vertical integrated supply chain in Vietnam. How it solved issues : The investment helps to introduce advanced production know-how accompanying agronomic expertise to upskill and improve the quality, safety standards and reputation of Vietnam’s rice exports. |
| CBH Group – Western Australian grain grower co-operative About the company : grain grower’s cooperative that handles, markets and processes grain from the wheat belt of Western Australia Mode of entry : Created a joint venture (Interflour Group) with another regional player through the acquisition of six flour mills in Indonesia, Malaysia and Vietnam12. How it solved issues : Using grain from Australian and around the world, Interflour supplies better quality flour to Vietnam domestic market for baking, noodle and confectionery production and malt to supply Vietnam’s drinks industry |
| Icon Group – Australia’s largest dedicated cancer care provider About the company : Reshaped cancer care by integrating distinct treatment disciplines. It has expanded globally, including some Asian countries such as Singapore, China and Hong Kong16. Mode of entry : Entered partnerships with two of Vietnam’s leading healthcare providers – The National Cancer Hospital in Hanoi (the K Hospital) and the Military 175 Hospital in Ho Chi Minh City. How it solved issues : The partnership helped upgrade Vietnam’s cancer care infrastructure to a larger scale, applying an international standard in medical excellence across hospital management and utilise innovative technologies to provide remote care as necessary17. They have also brought in experts from Icon Group’s Australian and Singaporean businesses to assist the Vietnamese healthcare providers. |
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| Raiz Invest Limited – an Australian fintech startup About the company : Australian fintech startup operating in Australia, Indonesia and Malaysia that allows customers to round-up everyday purchases and pool their spare change to invest in equities, bonds and other securities. Mode of entry : It is expected for Raiz to enter into strategic partnership with a local player similar to their strategy in Malaysia where they partnered with a local unit trust player How it can solve issues : Raiz provides a platform that increases the access to capital for the users (e.g. access to larger sum of money for investment). |
| RMIT University – an internationally recognised Australian university of technology, design and enterprise About the company: Innovative university in Melbourne, recognized for its study and research in technology, design and enterprise23. Mode of entry: In 2001, RMIT entered Vietnam by investing directly and opening its first campus in HCMC with services and facilities mirroring the Melbourne campus. A second campus opened in Hanoi in 2004 and in 2017, an English language centre opened in Da Nang. How it solves: RMIT Vietnam is assisting in the development of human resources capability in Vietnam. Degrees are awarded by RMIT University in Australia, allowing Vietnamese students to receive an overseas education without having to leave home. |
| English Learning Company (ELC) – an Australian award-winning English language school About the company: ELC offers a range of major English courses which are supplemented by a choice of electives. ELC has partnerships with a number of Australian universities and education providers. Mode of entry: In 2017, ELC entered Vietnam via a partnership with HUTECH University (Vietnam) to establish ELC Vietnam in HCM City to meet the demand for English in Vietnam. How it solved issues: Operating as a private English language centre, ELC Vietnam aims to provide students with a quality on-campus option for English language lessons. ELC works with a number of educational organisations in Vietnam to offer a paid teaching internship working in local primary and high schools with competitive prices for all English programmes. |
Kohki Sakata Chief Executive Officer +65 81682503 k.sakata@igpi.co.jp
Rachit Khosla Country Manager – Australia +61 414 433 572 r.khosla@igpi.co.jp This material is intended merely for reference purposes based on our experience and is not intended to be comprehensive and does not constitute as advice. Information contained in this material has been obtained from sources believed to be reliable, but IGPI does not represent or warrant the quality, completeness and accuracy of such information. All rights reserved by IGPI. __________________________________________________________________________________________ Kohki Sakata Chief Executive Officer
+65 81682503 k.sakata@igpi.co.jp
However, in accordance with Paris Agreement, six major ASEAN countries are also setting their targets to reduce greenhouse gases (hereinafter “GHG”) by replacing fossil fuels with renewable energies. Nonetheless, when examining their National Determined Contributions (hereinafter “NDCs”), it is necessary to bear in mind that most countries propose two frameworks towards achieving their target, one includes financial assistance from the international community, and the other without[4]. This means that foreign companies who wish to do business related to carbon reduction need proposals tied to the financial support framework. In addition, many countries adopt future targets compared against a business-as-usual (hereinafter “BAU”) levels, meaning they pledge to reduce CO2 emissions compared to their projection in the absence of major climate change policies. Additionally, Malaysia adopts their reduction target on carbon intensity against GDP basis. The table here-below lists the NDCs and major initiatives by governments in Southeast Asia: 
The above paragraphs served as a general discussion. Internal carbon price (hereinafter “ICP”) will be used as an example to explain factors that need to be taken into consideration. Businesses use ICP to evaluate the impact of mandatory carbon prices on their operations, and as a tool to identify potential climate risks and revenue opportunities[7]. ICP was introduced in Europe and the US over five years ago, and an increasing number of Japanese companies have adopted it in the past few years. When introducing ICP, the most important thing to keep in mind is to set a clear objective and design business strategies accordingly[8]. If objectives are not properly set, the business will end up on the Carbon Disclosure Project (CDP) list as “ICP introduced” but it is meaningless to be satisfied with this. It is easy but it is meaningless to only refer to competitor’s pricing. If companies want to invest in expensive but low-carbon equipment, compared to conventional equipment, in their factories or offices, the price must be at a level that makes low-carbon equipment more economically advantageous. As an oft-cited example, Microsoft has adopted a model in which each department pays an amount based on its CO2 emissions, whose price is determined by dividing necessary investment amounts to offset annual CO2 emissions[9]. This pricing mechanism is reasonable. CO2 emissions are also reflected negatively in Microsoft’s sales departments’ internal profit and loss statements, which incentivizes carbon reduction efforts. 
In the case of business investments, it is one way to refer to price levels that may have influenced investment decisions in the past (this is a pattern called “implicit carbon price”), not only referring to market price of carbon. Many companies adopt a market price such as the EU ETS (EU Emissions Trading System). While this makes a certain amount of sense from the perspective of scenario analysis, there is no guarantee that the carbon pricing imposed in different countries in future will be close to the current EU ETS price. Moreover, ICP is not a solution for everything. Even if a project pays off economically under a scenario where ICP is applied. There remains the possibility that the project may be forced into cancellation due to opposition from activists or institutional investors. While ICP can be useful if introduced wisely, it is not a panacea, but a tool in the overall strategy for businesses looking to reduce their carbon footprint. Kohki Sakata Chief Executive Officer
+65 81682503 k.sakata@igpi.co.jp
Miyoshi Nishimura Consultant – Singapore
+61 9187 1152
m.nishimura@igpi.co.jp
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