Debbie Too and Goh De No
BANDAR SERI BEGAWAN
WITH the latest edition of The Report: Brunei Darussalam 2010, published by the Oxford Business Group (OBG), slated for release within the next two months, industrial diversification still remains the theme of the annual report on the Sultanate.
Country Director for the OBG in Brunei Jana Treeck said that the key for Brunei, in order to fully maximise the value of exports, is to focus on value-added products and services in the downstream sector. The debate on profitability should go beyond usage of natural resources, Treeck said, adding that OBG views the theme to be more “within a new global context in 2010, which is marked by a recovery in external demand for oil products and improved macroeconomic performance due to a higher export income”.
The director in an interview with The Brunei Times gave her take on diversification in the country.
BT: You mentioned that the upcoming report will stick to its main strategic theme to place Brunei within a global context. In your opinion, what other avenues can Brunei take part in to fully maximise the demand for oil?
Treeck: The methanol plant is an important step in this direction and the key for the country will be to find cost-effective ways to implement downstream development that offers best margins on raw material inputs such as natural gas. The debate on profitability however, should go beyond usage of natural resources. The key to achieving diversification is importing new technologies, know-how and creating spin-offs in both production and services.
BT: You also mentioned that the inauguration of the Brunei’s first methanol plant is one of the main highlights of 2010. How do you think this will fare in the long run? Do you think that this new export income stream will eventually lead to further developments and the diversification of oil and gas within the industry?
Treeck: Indeed, the inauguration of the plant is a milestone, and these types of developments tend to be long-term in nature and their full impact will be visible in perhaps five years time. In the case of the methanol plant, its success will depend on whether it can become a harbinger for petrochemicals sector as a whole, putting Brunei on the global production map. I think that there is every reason to believe that this high profile initiative will draw international attention and that foreign investors are now well aware of Brunei as a potential investment destination in petrochemicals.
BT: The Brunei Halal brand however has received mixed reviews on its feasibility, especially since local brands represented by the Brunei Halal brand on supermarket shelves are yet to be seen. What have you observed about this development? How do you see local small-to-medium enterprises (SMEs) taking part in this venture?
Treeck: Similarly to the methanol plant, the main goal of creating the Brunei Halal brand is first of all tapping into the global value chain. By this we mean that it is important to create international awareness that this new niche opportunity exists in Southeast Asia and that it has become one of Brunei’s priority projects. Once that awareness is created, I think there will be plenty of spin-off opportunities for local SMEs as they will be in a strong position to offer their own local brands. We therefore do not have any doubts about the feasibility of this initiative and see a lot of upside for local firms.
BT: You mentioned that the OBG has received a number of enquiries from investors in Europe and the Middle East, what was the “draw” to the Brunei Halal brand, and were their interest purely for trade purposes or do they wish to collaborate as well?
Treeck: The interest is in developing a new premium niche within halal as they see great potential in Brunei’s untarnished image in Shariah-compliant products and believe the name itself will help create additional premium value in muslim countries in the Middle East.
BT: How do you see the pace of the business community moving towards His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam’s Vision 2035?
Treeck: It is no secret that Brunei is a country that is largely driven by the public sector. The private sector is naturally going to work towards His Majesty’s vision by virtue of the nature of the private sector. The real question is, “How is the private sector enabled to do their part in His Majesty’s vision?”. Government institutions and bodies that enable the private sector to grow and prosper are the true catalysts of progress in Brunei. Initiatives by the Brunei Economic Development Board (BEDB), particularly in housing and business incubation, allow for private sector growth and development. We have seen particularly strong growth in InfoCommunication Technology, real estate, construction and industry as a result of such efforts.
The BEDB has quite a diverse portfolio of activities. We see their efforts to streamline processes and procedures as well as their initiatives as one of the key drivers of progress in the country.
The Brunei Times