Baker Tilly's Andrew Heng shares business tips from his crisis playbook

The group managing director’s earliest practice dates back to the Asian Financial Crisis.

When you talk about insolvency and corporate restructuring, people at Baker Tilly Malaysia talk about Andrew Heng but not many know about his early days as a young lawyer handling bankruptcy and winding-up proceedings at the onset of the Asian Financial Crisis.

After seeing the market collapse, Andrew left practise and joined an accounting firm to specialise in insolvency and corporate restructuring. Two decades later, he is now group managing partner at Baker Tilly, one of the largest accounting and business advisory firms in Malaysia.

Faced with another collapse but honed with more eloquent wisdom, Andrew thinks this is the time for Malaysia’s digital service providers and machinery manufacturers to shine. “Technology will be a big play—robotics in particular and automation technologies that help in getting core tasks done. Malaysia will certainly have a substantial role to play here,” he noted.

Other particular bright spots, he says, include healthcare, gloves manufacturing, solar energy, food production, logistics and warehousing, as well as business process outsourcing.

Singapore Business Review reached out to Andrew ahead of the Malaysia International Business Awards to talk about the best industries to put your money on post-Covid, new outsourcing locations, as well as the evolution of e-commerce and social media platforms as more people move their shopping habits and businesses online.

Which particular markets or sectors are your main focus? Can you share with us your work experience or any backstory that has contributed to your professional career?
In 1998, I graduated with a Law and Commerce Degree and began my career in a law firm against the backdrop of the Asian Financial Crisis. As a young lawyer, I was given a lot of bankruptcy and winding-up proceedings assignments. While I worked on these files, I empathised with these unfortunate companies. The system was that if you missed six monthly instalments, the banks would come after you. Yet, who could blame these companies when the market had collapsed? Perhaps some leeway must be considered and granted before the last resort is taken?

It was as if I heard my calling into the field of insolvency and corporate restructuring. I believe more help should be given to good companies in unforeseen circumstances. So, I quickly made a decision. I stopped practising, and I joined an accounting firm specialising in insolvency and corporate restructuring. Now, two decades later, I am the Group Managing Partner of Baker Tilly, one of the largest accounting and business advisory firms in Malaysia. While I oversee the firm as a whole, my professional work still revolves around Corporate Advisory, Insolvency and Forensics.

Which industries are foreign investors and companies putting their bets on? What's the situation across industries, particularly for those heavily reliant on multinationals?
Currently, the healthcare industry, especially the manufacturers of medical gloves, are doing very well—evident through the soaring share prices in the Malaysia bourse. We've also observed strong interest from foreign investors in the technology sector. It is not that surprising as businesses and investors are beginning to realise the importance of automation and cloud computing as part of business continuity planning since the outbreak of the virus. As for businesses relying on multinationals, operations are still ongoing albeit slower. The slowdown in the economy is not expected to kill off these businesses completely.

Crisis presents opportunities, they say. Where are the opportunities and how does Malaysia fare in all these? How can it catch up with the emerging markets in APAC?
Technology will be a big play—robotics in particular and automation technologies that help on getting core tasks done. Malaysia will certainly have a substantial role to play here—this is the time for our local digital service providers and machinery manufacturers to shine! The key here lies in their ability to creatively come up with innovative solutions to effectively and efficiently solve problems faced by companies as well as individual consumers.

Investors should also keep an eye for the logistics and warehousing industry. Since various restriction measures were implemented by governments across the world in March, shipping and delivery companies have seen an increase in demand for their services. Industry players are expecting this phenomenon to last even after the pandemic blows over as more people are moving their shopping habits and businesses online via platforms like Facebook Live, Taobao, Amazon and in Malaysia, Shopee and Lazada. For investors, this might be a good time to mark warehouse-managing machinery manufacturers as the logistics and warehousing industry will soon need to look into automation technologies to manage their warehouses better.

Overseas, we are seeing an emerging trend of virtual healthcare, or what some people call "telehealthcare", a way for medical practitioners to treat their patients remotely. In Malaysia, the trend has yet to pick up, but I believe it will soon be a new normal for us to see our doctors on virtual platforms for medical consultation and to have our medicines mailed to our homes.

Another industry to observe would be the outsourcing industry. Business process outsourcing or outsource CEO, outsource HR, is already gaining traction in the market as companies are looking to reduce operational costs. As companies reanalyse their market positions and operation structures, demand for restructuring services will rise, so will cash flow management and business process advisory services.

With current global market conditions, most companies would have a common goal, that is, to preserve cash flow. Slowly but surely, operations will be outsourced, and production centres will be closed or moved to a more cost-efficient country, for example, India or Vietnam. While Malaysia has a multilingual advantage to other emerging markets, its unstable political environment may deter companies who are looking to relocate. Malaysian companies should also look towards polishing their core competencies by improving the quality of their products and services.

For homegrown Malaysian companies looking to expand overseas, is this the best time? How can multinationals stand to benefit from the current situation?
There is never the best time, only a time when you are ready, and you are in the industry that the global market is thirsting for. If you ask me, I think this is a good time to expand for healthcare, gloves manufacturing, solar energy, food production, logistics and warehousing companies.

Governments around the world are also putting in the effort to draw investments into their country by offering various incentives to foreign investors and foreign companies. So, for multinationals, this might be a good time to look into expansion as well as merger and acquisition opportunities. A great pool of talent will be readily available due to the displacement of staff from industries that are affected by the pandemic crisis.