Regional food mart may triple by 2010

Regional food mart may triple by 2010

SINGAPORE (AFP): Southeast Asia's food and agriculture business market could triple to US$60 billion annually by 2010 despite rapid industrialization in the region, a conference was told here.

"The market is expected to grow tremendously as the region's population surges from 450 million currently to 615 million by 2010," said Philip Yeo, chairman of Singapore's Economic Development Board.

Yeo was speaking at a regional conference on the outlook for Southeast Asia's food and agribusiness.

The region's food market was $19 billion in 1992 and "in value terms, it has the potential to triple to $60 billion annually," he told about 200 executives from 25 countries attending the seminar.

Yeo said average annual market growth rates in the food industry in Asia were estimated to range between five and 12 percent, comparing favorably with the zero-to-three percent growth in the saturated markets of the United States and European Union.

Outside Southeast Asia, the China market, with 1.25 billion people, dominates with a 79 percent share of the entire East Asia food and beverage markets, the conference was told.

International food companies eying the Asian market were cautioned that the region could not be treated as one homogeneous entity because tastes varied with different regional cultures.

The seminar was organized by Rabobank International, the wholesale banking division of the Netherlands' leading food and agribusiness banking group Rabobank.

Roel van Veggel, Rabobank's senior marketing manager, said despite rapid industrialization, there was big potential for the food and agribusiness market in Asia as the region sought to feed a growing population.

The upbeat forecast was based on the bank's studies of the industries in India, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

"The industries in the region however have to be more modern and efficient to become competitive," he said.

Among the top concerns of chief executives interviewed in a recent study on food and agribusiness companies in the region were competition in local markets and rising raw material costs, officials said.

The study by the National University of Singapore listed keen competition in export markets and lower profit margins in local markets as being among the concerns.