BDO Singapore executive director taps into the importance of SEA as a global manufacturing hub

Eric Tan is one of the judges in Asian Export Awards 2020.

Eric Tan, executive director, advisory at BDO in Singapore has over 18 years of professional experience in providing assurance and advisory services having worked in London for over five years and Singapore/Malaysia for over 13 years.

In the last eight years, Eric has been advising and assisting businesses achieve their strategic plans via mergers & acquisitions (M&A)/ strategic partnerships, covering deal origination to completion and post-deal support. An experienced financial due diligence practitioner, Eric had also supported transactions of listed companies, private companies and private equity houses across multiple sectors in the Asia Pacific region.

In an interview, Eric notes that he believes Asia Pacific will come out of this crisis strong but businesses will need to evaluate how consumer behaviours, trends and needs will change thus, they should reflect and reassess their business model and change their business strategies as necessary while consider getting a partner on-board to capitalise on future opportunities.

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?

I started off my career in audit specialising in the insurance sector before an opportunity came about to be part of the transaction services/M&A team in my previous firm. It was a privilege as the opportunities in this field had really widen my scope over the years and it was fantastic to be able to contribute directly to supporting entrepreneurs and businesses achieve their strategic goals, whether by inorganic growth, strategic partnerships or monetise their wealth from an eventual exit across a variety of industries including manufacturing, business services, food & beverage, oil & gas, logistics, healthcare, real estate and retail/distribution.

It has been an enriching and continuous learning process throughout my professional career and I have been fortunate to have many mentors to guide me over the years, to having strong support from the team and trusted relationships developed with clients and business associates along the way. At BDO, the same philosophy applies where we are committed to a long-term relationship as the trusted adviser for our clients in particular for SMEs to help them navigate the uncertain and ever-changing economic and market conditions.

Tell us about the biggest trends you've observed from Asia Pacific's regional export scene for the past six or 12 months.

No doubt, COVID-19 has truly dealt the Asia Pacific region a severe economic blow, adding to the economic problems for some countries that started in 2019 (over the US-China tension and broader economic uncertainties) with enforced economic lockdowns, reduced global (non-essential) consumptions; now all contributing to significant slowdowns or negative economic growth and contraction in exports from the region. And as the US-China trade difference deepens and the resurgence of the COVID-19 infections in Europe, a bumpy ride is expected in the near future.

Separately, with the US-China tension, we also now see the increasing importance of SouthEast Asia, both as a global manufacturing hub and a fast developing market for global players. We have been seeing US centric businesses shifting their supply chain out of China to be supported by emerging countries in South East Asia such as Vietnam, Thailand and Malaysia. So there has been some shift with those countries benefiting from increased foreign investments and resulting greater contribution to regional exports. This aligns to what we have seen as in the months before the pandemic, there had been an increased level of enquiries by US, China, and Japanese companies looking at opportunities in this region.

With strong fundamentals, Asia Pacific is expected to come out of this crisis strong but as COVID-19 will have a long lasting impact on the global economy, businesses will need to evaluate how consumer behaviours, trends and needs will change and correspondingly, reflect and reassess their business model and change their business strategy as necessary. Such businesses should also think about how to utilise technology, data and creating a strong brand, online presence and IP in their business model.

What is the pandemic's impact on intra-regional trade, particularly on exports? Which industries are able to stay resilient in these trying times?

I feel the pandemic has in fact exacerbated the concerns arising from global politically driven trending towards nationalism and protectionism. Businesses in this region will need to reassess their role in the global trade development especially with a number of country leaders seeing the need to secure essential supplies for events such as this pandemic. With evaluation of local production to meet each country’s minimum needs of such essential goods and services, intra-regional trade will likely be affected in the near term.

Overall, I feel that businesses such as food supplies, FMCG, logistics and health/wellbeing/hygiene which have done well during the pandemic will stay resilient and flourish; so will those in sectors that will benefit from the anticipated changes in consumer behaviour/market trends (particularly due to work-from-home, work-from-anywhere, digitalisation, e-commerce, 5G).

What can businesses learn from the crisis? For those who have been badly hit, what do they need to consider to become more profitable and sustainable in the future?

The increased level of support from the government for local businesses to upgrade their business is a clear message that SMEs must transform and scale up or get left behind, knowing that doing nothing or waiting is probably the wrong answer. This crisis would have accelerated the decision to move towards this path as it is evidently clear from the pandemic that businesses need to be nimble and be able to react quickly to change. What works well today might not work tomorrow and in difficult economic times, incorporating agility and diversification will benefit businesses to swiftly reposition products and services, and geographical reach. I have clients in badly hit sectors that were able to quickly change their business direction to remain resilient and are doing relatively well despite the pandemic effect.

It is imperative that businesses consider the on-boarding of a strategic and/or financial partner with the right experience, know-how, network and corporate finance capabilities to overcome immediate issues such as on business continuity, supply chain, financing and workforce management. They can also help to collectively reassess the business strategy moving forward based on possible ‘new’ post crisis needs of customers. These are important steps for businesses to remain relevant and competitive in the new norm and to capitalise on future business opportunities.