Hong Kong: China’s Financial Gateway To The World

As the most important gateway to China, Hong Kong is constantly strengthening its connectivity to enhance cross-border transactions. With its free port status and an autonomous customs territory, the city is building financial linkages across Guangdong, Hong Kong and Macau, which together comprise the Greater Bay Area (GBA).

Hong Kong facilitates about two-thirds of China’s inbound and outbound foreign direct investments and provides a channel for the global trade of Chinese goods and services. The financial hub has helped boost the international usage of renminbi (RMB), which is now the world’s fifth most active currency, accounting for 2.2% of international payments as of August, data from Swift shows.

Banks in the city currently handle 75% of RMB flows around the world and that figure is poised to grow with China and Hong Kong promoting cross-border RMB investments and financing activities. Mainland enterprises are also issuing green and sustainability related products in Hong Kong, aiming it to become a hub for green finance within the GBA.

“Different stakeholders have been engaging in conversations and preparatory work to enhance Hong Kong’s connectivity as well as standards of financial services and product offerings,” says Laurence Li, Chairman of the Financial Services Development Council (FSDC), a high-level cross-sectoral advisory body set up by HKSAR Government in 2013 to promote Hong Kong’s financial services industry. “With some favourable measures being introduced and implemented in an orderly manner, the industry believes the ever-improving connectivity of financial markets will lead to uncharted market potentials.”

Capturing Opportunities

To help Hong Kong’s financial services industry capture market opportunities in the GBA, the FSDC has recommended and advocated for connecting cross-border payments and transfer infrastructure; enhancing the convenience of remote account opening procedures; and fostering cross-boundary mortgage financing, insurance and wealth management businesses.

The recently launched Wealth Management Connect scheme will help mainland investors diversify investment portfolios through exposure to overseas markets via retail funds domiciled and regulated in Hong Kong, while attracting offshore investments to onshore wealth management products in Mainland. It will also allow Hong Kong investors to broaden their mainland exposure.

Accelerating Internationalisation

Coming after the Hong Kong stock connect with Shanghai in 2014 and Shenzhen in 2016, the scheme will deepen the linkages between the two markets. These significant developments in the liberalisation of China’s capital markets would accelerate RMB’s internationalisation and strengthen Hong Kong’s position as a global offshore RMB hub, KPMG said in a recent note to clients.

The new southbound leg of China’s Bond Connect programme will further stimulate demand from mainland Chinese investors for Hong Kong and U.S. dollar-denominated bonds, boosting liquidity and facilitating a more efficient price discovery process. It could also broaden the investor base for both Hong Kong dollar and offshore RMB bonds.

The constant improvement of Hong Kong’s financial market linkages to China will help establish the territory as the future hub for fintech and digital assets across the GBA. As more cross-border products and services become available, Hong Kong will steadily march towards its vision of becoming the world’s premier wealth and asset management centre.

           To find out more      Follow FSDC on LinkedIn

www.fsdc.org.hk

 

Beximco Health: Beximco Adopts Cutting Edge Technology In The Fast Changing Textile And Garment Industry

Global textile and apparel makers are accelerating their digital transformation amid intensifying competition from online fashion brands and booming demand for e-commerce in the wake of the Covid-19 pandemic that has kept consumers at home as cities around the world went into lockdowns to curb the coronavirus from spreading.

With the pandemic upending the fashion industry, Beximco—Bangladesh’s leading textile and apparel maker—is leveraging innovative technologies to gain global market share and deepen relationships with customers in the fashion and retail industries.

“Global competition is increasing with the rise of fast fashion and digital only players,” says Syed Naved Husain, Group Director and CEO of Beximco. “Traditional retailers are under financial pressure and players such as Amazon and Primark—are fast moving and at the forefront of the digital economy and are gaining market share. Retailers that can adapt and change quickly, such as Zara and Target, are doing well, but they want to work with suppliers who can also change and adapt quickly.”

Beximco has been quick to adapt technological innovation, one of its hallmarks since it began operations over 26 years ago. The company employs advanced design, manufacturing and distribution solutions to add value to its customers’ businesses across the entire value chain. It’s a one-stop shop that gives clients best in class service with flexibility, agility and speed.

“We’ve taken a very proactive approach to the implementation of production technologies and processes that have the greatest impact on efficiency and product quality,” says Group Chairman of Beximco, A. S. F. Rahman. “We collaborate closely with our customers across the entire value chain. Beximco also invests in the education, training and skills development of all its employees, enabling them to support the production of differentiated value-added garments.”

Smart Fabrics

One area Beximco has excelled in is its use of “smart fabrics,” or textiles that leverage technology for fashion or design purposes. About 45 percent of apparel companies surveyed by McKinsey in February 2020 are looking to integrate more innovative materials into their products, a trend McKinsey describes as “materials revolution.”

Beximco makes use of performance fabrics that can be engineered to integrate features such as thermal management, quick drying, extra durability, antimicrobial, odor free, or UV protection. In partnership with brands such as Zara, U.S. Polo Assn, Land’s End and Marks & Spencer, the company makes garments that look stylish for work, but wearable for outdoor and sports activities because of features such as all-way stretch, temperature regulation and reinforced seams.

3D Design Solutions

Beximco also utilizes 3D design technology to efficiently showcase samples to clients. The digital solution—developed by fashion design software firms CLO and Browzwear—enables realistic garment simulations.

Using the software, designers can make virtual samples, see how the designs fit on models and show them to buyers at different locations, without cutting any fabric. This speeds up the design process and enables the designers to save time and resources, while identifying potential issues with the fit and pattern.

“3D processes will result in reduced approval timelines and less fabric wastage, enabling Beximco’s designers to be more creative and have closer collaboration with their counterparts at the brands,” says Husain.

SmartLab New York

Beximco customers in the U.S. can even access the company’s cutting edge technology at its SmartLab in New York. Designers and product developers who visit the SmartLab are able to develop garment washes that fit their requirement on the spot, and digitally transfer their chosen wash recipe to Beximco in Dhaka for bulk production.

The company is also building a network of “urban factories” that will help designers develop and produce a small batch of orders for trials or test marketing. These facilities can make up to 1,000 pieces of garments for quick-to-market and pre-bulk-buying runs.

“This will save customers travel and shipping time and provide them with many of the same capabilities in New York as would be available in Dhaka,” says Husain. “The SmartLab New York also allows fashion design students in the U.S. to practice creating washes and looks using the SmartLab software and immediately see their designs in actual fabrics.”

Beximco’s technology initiatives help to slash manufacturing lead times and retailers’ time to market, allowing the company to cater to fast evolving fashion trends. Recognizing the firm’s capabilities, Zara Women exponentially boosted its orders with Beximco.

Fighting Covid-19

The company’s agility and flexibility was put to the test as Covid-19 spread rapidly last year. At the height of pandemic, Beximco quickly pivoted to make fabrics for the manufacture of personal protective equipment (PPE).

The company leveraged its existing strengths in technical fabric, sewing and large scale manufacturing to launch Beximco Health—a new division dedicated to making PPE materials for the production of surgical and isolation gowns, coveralls, as well as N95 masks. The new division built a new facility, with clean room and PPE testing lab, on the group’s 20-acre (80,900-square meter) campus in a very short period of time.

Since advanced PPE testing facilities were limited in Bangladesh, Beximco formed a strategic partnership with Intertek UK to create an on-site laboratory. The 12,000-square feet (1,100-square meter) Centre of Excellence PPE Lab conducts physical, chemical and microbiological testing, enabling Beximco to obtain PPE certifications fast. Following its launch, one of the first shipments was the delivery of 6.5 million PPE gowns to the Federal Emergency Management Agency in the U.S.

“The new Beximco facility marks an important step in the diversification of the global supply chain, especially for healthcare equipment,” says Earl R. Miller, the U.S. Ambassador to Bangladesh, who personally witnessed the shipment of the PPE gowns to the U.S. from the airport. “Beximco instantly saw the dangers of this dependence and invested to meet the challenge, and it’s not the first time Beximco has risen to the challenge posed by a disrupted supply chain.”

To find out more

www.beximco.com

 

HSBC Global Private Banking Aims For Mainland China Market Leadership

Jackie Mau, Head of Global Private Banking, Mainland China at HSBC

With a substantially bigger and better-resourced presence in mainland China than any other foreign bank, HSBC has made no secret of its ambition to establish its private banking business as the country’s foremost international wealth manager, a key milestone in its mission to achieve a similar dominance across the wider Asian region.

To achieve this, HSBC has committed one third of its total planned Asia-focused private banking development spending to expand its onshore resources in China. HSBC Global Private Banking is set to extend its presence in mainland China well beyond its current Shanghai, Beijing and Guangzhou hubs in the next five years.

As part of this strategic expansion, a massive pan-Asian recruitment drive is underway, a move that will add 5,000 client-facing wealth management and private banking staff by 2025. With the hiring of relationship managers, investment counsellors and specialists, HSBC can better support affluent, high-net-worth (HNW) and ultra-high-net-worth (UHNW) clients in mainland China, Hong Kong and Singapore. This commitment will also double the size of HSBC Global Private Banking’s wealth management staff in the mainland.

Key Strategic Appointment

Perhaps the most crucial move with regards to achieving the bank’s aspirations is the appointment of Jackie Mau in August as Head of Global Private Banking, Mainland China at HSBC.

Previously Regional Head of UHNW for HSBC’s Global Private Banking Team, Mau believes the time is right to further enhance the group’s private banking and wealth management services in China.

“While it’s fair to say that the market has been quite volatile, a development that has made many of our high-net-worth clients take a defensive stance, we are now at what I’d term the mid-cycle phase,” Mau says. “This is the point where risk diversification becomes highly advisable, something we can clearly help with. At the same time, China’s domestic consumption is surging. Shopping malls are teeming and demand for luxury goods remains impressively robust. For our global clients, a little exposure in China would definitely help bolster their portfolios.”

Mau also believes that mainland China’s ongoing macro-economic development will, ultimately, usher in increased demand for HSBC Global Private Banking’s diverse service offerings.

“HSBC Global Private Banking positions itself across a wide client continuum from high-net-worth individuals to their ultra-high-net-worth counterparts,” Mau says. “For our more affluent investors, we have a dedicated raft of professional consultants and investment advisers available. They can help with any arising wealth management issues, while also leveraging the support of our Hong Kong- and Singapore-based specialists from the philanthropy advisory and charitable service teams for those families or individuals looking for the most efficient and effective ways to give back to their communities, shaping a better and more sustainable future.”

Digitalisation, ESG and the GBA

Three factors are widely perceived to deliver significant changes to mainland China’s massive wealth management market. These are the growing preference for enhanced digital engagement channels, an increased commitment to Environmental, Social and Governance (ESG) aligned opportunities on the part of mainland investors, and the prioritisation of the huge Greater Bay Area (GBA)—comprising Guangdong, Hong Kong and Macau—as one of the country’s key growth drivers over the coming years. Mau sees all three as representing an opportunity for HSBC Global Private Banking to take a lead, distinguish itself from its competition and deliver clear benefits to its clients.

On the innovation front, the bank is heavily investing to develop a new generation of digital capabilities that will meet—if not exceed—the expectations of the country’s highly tech-savvy investors. “China’s second generation HNW individuals, as well as successful new economy entrepreneurs, all want to interact with their banks in quite a different way to the channels private banks have been accustomed to,” Mau says. “Looking to meet this challenge head on, we are developing a new generation of robust digital platforms that will allow our clients to access a host of online services, including virtual meetings with relationship managers, and the execution of any required transactions.”

In terms of ESG, HSBC Global Private Banking again prides itself on taking a proactive approach, anticipating its client requirements and evolving the required products, services and solutions in time to meet emerging demand.

Acknowledging the growing importance of ESG in investment portfolios, Mau says, “While our unparalleled global and regional reach allows us to onboard a comprehensive portfolio of ESG funds, our commitment goes beyond that. As a group, ESG is very much part of our DNA. This is reflected in our sustained support for a wide variety of related communities, education and environmental protection projects.”

The GBA is also very much a core element in HSBC Global Private Banking’s onward strategy. Recognising the opportunity offered by a region that is already home to one fifth of China UHNW individuals, plans are already in place to significantly expand the bank’s presence within its borders.

“In addition to our existing strengths in Hong Kong and our GBA Wealth Management Connect service, we’re recruiting up to 3,000 personal wealth planners within four years to scale the Group’s mobile wealth planning service in mainland China,” Mau says. “We are also looking to help meet the needs of entrepreneurs via such capital management initiatives as HSBC GBA Business Credit Connect. In short, we believe we have the key building blocks to emerge as the dominant player within the region.”

Talent, Talent, Talent

As to the wider challenge of securing an equally preeminent position across the mainland China market, Mau is confident that one key element of HSBC Global Private Banking’s strategy that would allow the bank to achieve its goal is talent.

“Recruiting, developing and retaining the right talent is at the very heart of our strategic growth plan,” Mau says. “As the wealth management sector in mainland China is still in its infancy, we will work with local talent and supplement with the best from Hong Kong and throughout Asia. We will also nurture a new generation of graduate trainees from local universities in mainland China as a sign of our long-term commitment to the country. In the end, whether you are a local client looking to go global or an overseas investor looking for an exposure in the China market, you can be confident that HSBC Global Private Banking’s depth of resources, experience and reach will more than exceed your expectations.”

 

privatebanking.hsbc.com

 


Disclaimers

The information contained in this article has not been reviewed in the light of your individual circumstances and is for information purposes only. It does not purport to provide legal, taxation or other advice and should not be taken as such. No client or other reader should act or refrain from acting on the basis of the content of this article without seeking specific professional advice. Issued by The Hongkong and Shanghai Banking Corporation Limited.


 

J.P. Morgan: Asia At The Forefront Of Accelerated Digital Transformation

Kam Shing Kwang, CEO of J.P. Morgan Private Bank in Asia, aptly captures the pace and scale of the accelerated digital transformation during her welcome speech at the sixth annual J.P. Morgan Tech Exchange that was concluded in early June 2021. Global spending on digital transformation will reach US$6.8 trillion between 2020 to 2023, with 65% of global GDP expected to be digitalized by 2022, Kwang said.1

The three key areas of technological transformation are artificial intelligence (AI), big data, and cloud computing. Emerging digital trends, such as e-commerce, IoT and smart cities are converging, thought leaders, chief executives, entrepreneurs and investors said at this year’s Morgan Tech Exchange conference that was attended by more than 650 J.P. Morgan Private Bank clients.

Whilst convergence of different areas of digital transformation is underway, facilitating resilience and enabling efficiencies, there’s also a shift of value creation around the world. The Morgan Tech Exchange also reflected on the increase in innovation and the tilt to value creation in Asia, underscored by the value raised in Asia capital markets.

Unlocking the Full Potential of AI, Big Data and Cloud Computing

AI, big data and cloud computing are already heavily used but each will see continued convergence, unlocking further impact and efficiencies. Kwang expects AI to contribute US$15.7 trillion to the economy by 2030,2 driven by the numerous innovative applications from self-driving cars, virtual travel booking agents, autonomous customer service chatbots and robots as well as AI-driven social analytics. The potential is huge in Asia as digital transformation is being widely embraced in this region. The market for AI in the region is forecasted to rise at a CAGR of 41.6% from 2019 to 2027.3 Asia is leading the way on how these technologies will be ingrained in many facets of people’s lives around the world.

Earlier this year, a Tokyo-headquartered multinational automotive maker started to build a prototype “city of the future” at the foothills of Mount Fuji. This will be a testing ground—transformed with AI, autonomous cars and IoT homes—for building a smart city that can then be replicated around the world.

For big data, the global market is forecasted to more than double to US$103 billion by 2027 from 2018 levels.4 A more recent example of big data being leveraged successfully in the region is the “Big Data Migration Map,” which Kwang described as a popular cutting-edge app that utilizes mass data aggregation. The app’s popularity is due to its ability to predict changes in the epidemic situation in China.5

Cloud computing is no doubt an area that saw an exponential increase in adoption due to the pandemic as businesses were forced to embrace remote working capabilities. During a time that the world needs to operate remotely, it has propelled cloud infrastructure and cybersecurity to become the foundation of running businesses with minimal disruption even during the pandemic.

“Global spending on digital transformation will reach US$6.8 trillion between 2020 to 2023, with 65% of global GDP expected to be digitalized by 2022.”

– Kam Shin Kwang, CEO of J.P. Morgan Private Bank in Asia

Asia Drives Digital-First Economy

Asia is leading the world’s digital transformation journey and a prime mover in the worldwide e-commerce boom. Asia Pacific will account for 42.3% of retail and e-commerce sales worldwide.6 China’s dominance in e-commerce means that 62.6% of all digital sales will take place in Asia Pacific.6 The growth is driven by the region’s growing middle class, young population and increasing Internet penetration. Asia’s e-commerce revenues will continue to grow, reaching US$1.9 trillion by 2024.7

The Morgan Tech Exchange this year revealed many insightful takeaways in the world’s digital transformation, particularly the emergence of new tech titans from Asia. In recent years, many of the world’s biggest companies are from the region, with a number of Chinese e-commerce firms competing head on with U.S. tech giants.

In Southeast Asia, homegrown e-commerce firms are beating U.S. and international rivals, Patrick Grove, founder and CEO of Malaysian Internet group Catcha Group, said at the conference. A similar trend is happening in ride-hailing and food delivery, he added.

This trend suggests that the global technology landscape has evolved and will continue to evolve, with more Asian tech giants spreading their wings around the world. “If you look at the valuations of the top 15 or 20 tech companies, the top ones are probably two-thirds in the United States, and the other one-third in China,” Eric Schmidt, co-founder of Schmidt Futures and former chairman and CEO of Google, said at the Global China Summit hosted by J.P. Morgan this year.

These technology companies in Asia have also helped lead stock exchanges in Hong Kong and Shanghai to become two of the three largest stock exchanges globally in 2020, respectively raising US$51.28 billion and US$49.42 billion.8

Technology Builds Resilience and Enables Efficiencies

What do these trends mean for companies, investors and consumers?

One of the greatest impacts of technology is it has allowed companies to be resilient even as the pandemic disrupted industries and societies. The robust Internet infrastructure in many countries allowed companies to shift to remote work during lockdowns, helping curb the spread of Covid-19.

E-commerce is one of the technology trends that has directly affected most consumers, including the older generation who used to be typically averse to technology. Around the world, consumers stuck at home due to government-enforced lockdowns and travel restrictions turned to online shopping and food deliveries, boosting the usage of digital payments such as e-wallets.

With the growth of e-commerce, AI-driven innovations followed. For instance, businesses developed new applications such as AI-empowered customer relationship management solutions that enable online stores to tailor their sales recommendations to customer preferences based on their purchase history. Such innovations helped e-tailers boost their online sales even more.

For investors, AI is one of the key technologies that has been transforming the investment process. In finance, AI can be used to identify trends by leveraging high volumes of data (big data) in order to discover repeatable patterns and predict the direction and trajectory of asset prices. The use of AI and big data has also fueled the growth of fintech, with the global AI fintech market predicted to increase at a CAGR of 23.4% in the next five years to reach US$22.6 billion by 2025.9

For veteran investors, technology trends combined with other global trends has transformed the investment landscape. The trends that come with globalization and economic growth woven together also make for a complex world of investing. Thankfully, AI, big data, and cloud computing infrastructure is something technology can help decode and simplify.

The pandemic has certainly accelerated the move toward a digital-first economy and this momentum isn’t slowing anytime soon. Investing with experienced managers who have expertise in digital disruption and innovation offers potential returns.


1. Source: https://www.idc.com/getdoc.jsp?containerId=prUS46967420. Data as of Oct 29, 2020.

2. Source: https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html. Data as of 2017.

3. Source: https://inkwoodresearch.com/reports/asia-pacific-artificial-intelligence-market/.

4. Source: https://www.statista.com/statistics/254266/global-big-data-market-forecast/. Data as of March 2018.

5. Source: https://www.weforum.org/agenda/2020/04/how-next-generation-information-technologies-tackled-covid-19-in-china/. Data as of April 8, 2020.

6. Source: https://www.emarketer.com/content/global-ecommerce-2020. Data as of June 22, 2020.

7. Source: https://www.statista.com/forecasts/1117851/worldwide-e-commerce-revenue-by-region. Data as of July 7, 2021.

8. Source: https://www.hkex.com.hk/-/media/HKEX-Market/Market-Data/Statistics/Consolidated-Reports/Annual-Market-Statistics/2020-Market-Statistics.pdf. Data as of January 2021.

9. Source: https://www.forbes.com/sites/louiscolumbus/2020/10/31/the-state-of-ai-adoption-in-financial-services/?sh=34e2b0362aac. Data as of October 31, 2020.


How J.P. Morgan Digitalized Financial Services In A Transformative Way

One of the companies that has been using innovative technology to digitalize its services is J.P. Morgan. To stay at the forefront of the digital revolution, the bank has made substantial investments in technology to benefit its customers, including entrepreneurs and other clients.

JPMorgan Chase is the first major U.S. bank to roll out an AI-powered virtual assistant that makes it easier for corporate clients to seamlessly move money around the world, whether it’s for routine payroll or multi-million-dollar mergers and acquisitions. This technological innovation enables the bank to offer a multi-channel, and consistent customer service. The virtual assistant provides clients instant information, such as balances, on demand. Machine learning also enables the app to adapt to the clients’ behavior over time to make useful recommendations.

The bank also serves entrepreneurs, whether they’re running a trendsetting consumer goods startup or a tech disruptor. The bank focuses on solutions for high-growth, disruptive companies at every stage of their life cycle, from day one to IPO and beyond. One of the innovative technology tools that J.P. Morgan offers clients is Chase Cashflow360, which enables entrepreneurs to connect digitally with suppliers and customers to automate invoicing, payments, approvals and reconciliation.

While J.P. Morgan Private Bank aspired to continue to connect and engage with its clients via their existing channels of choice at the height of the pandemic last year, the disruption brought about by Covid-19 called for new modes of communication, and rapidly accelerated the Private Bank’s digital transformation agenda.

In February 2021, J.P. Morgan Private Bank launched the WhatsApp Business Account in Asia, in order to communicate their latest insights via the popular instant messaging platform. They were the first private bank to leverage a Business Account to broadcast insights to clients. They also deployed a chatbot on their official WeChat account, which further engaged a subset of clients and followers on this platform preferred by clients in China. In doing so, J.P. Morgan has been leveraging the best communications technology that suits their clients’ needs.

Since the onset of Covid-19, J.P. Morgan Private Bank has also launched a Virtual Events Hub, allowing clients to access live events and replays with the most influential thought leaders from across J.P. Morgan and renowned guest speakers from various sectors. The bank has hosted over 160 virtual events, in webcast, Zoom meetings and conference call formats, covering ideas and insights across macro economy, investment, wealth planning, cybersecurity and philanthropy.

People’s needs and behaviors are changing and J.P. Morgan is changing with them.


J.P. MORGAN: SERVING ASIA FOR OVER A HUNDRED YEARS

J.P. Morgan is one of the world’s oldest, largest and best-known financial institutions. With a history dating back over 200 years, the bank has US$2.6 trillion in client assets under management, a net worth of US$476 billion and 250,000 employees to date.

J.P. Morgan is no stranger to technological innovation, having been the banker to Thomas Edison’s Edison Electric Company in 1878. The group continues to innovate. The company recently invested in partnerships with high-profile startups, including OnDeck and Roostify to the tune of $600 million. In June 2021, it acquired OpenInvest, a San Francisco-based startup backed by Andreessen Horowitz. Through the platform, clients globally can create highly personalized, dynamic and value-based portfolios.

J.P. Morgan also has a rich history in Asia. This year, it is celebrating its centennial in China, where the bank’s roots began in 1921 when predecessor Equitable Eastern Banking Corporation opened its China branch. Equitable Eastern Banking later merged with Chase National Bank in 1930. In 2007, J.P. Morgan received approval to establish JPMorgan Chase Bank (China) Co. Ltd., becoming the country’s first locally-incorporated foreign bank, with its head office set up in Beijing.

The bank also has a strong private banking arm in Asia. The bank has been named Best Private Bank—UHNWIs by the Asset Triple A Private Capital Awards for Private Bank for the sixth year running. Globally, full-year revenues at its wealth management arm rose 4% to a record of US$6.6 billion in 2020 from the previous year. The number of wealth management client advisers rose 2% to 2,462, giving the bank a 12:1 ratio of clients per adviser.

J.P. Morgan continues to raise the standard in private banking, delivering a uniquely elevated experience shaped around its clients.

Learn More

learn.more@jpmorgan.com 

Petronas: An Aspiration For A Sustainable Future

India’s largest single location open access solar farm of 175 MWp at Gadag, Karnataka.

There is no doubt that climate change is one of humanity’s greatest challenges. Its effects are detrimental and range from sweeping ecological damage and community impact to potentially trillions of dollars of losses in economic cost.

Cognizant of this, PETRONAS, as a global energy solutions provider, is guided by its Net Zero Carbon Emissions (NZCE) aspiration. The goals of NZCE are driven by a clear path to combat climate change and generate near-term macroeconomic payback for the Malaysian economy while delivering a sustainable future for the world, its people and the business.

To achieve NZCE, PETRONAS has identified four building blocks to balance the energy trilemma, defined as energy security (supply), energy equity (affordability) and environmental sustainability. These are building operational excellence, making cleaner energy more accessible, accelerating technology and innovation stewardship, and investing in nature-based solutions.

Driving Forward

With this clear vision articulated, PETRONAS has already begun to pursue more climate friendly solutions and opportunities in the broader energy space, while creating new sustainable values for the organization.

These new values include boosting energy efficiencies through the increased use of natural gas and renewable energy supply capacity such as solar power and hydrogen. Complementing these efforts is PETRONAS’ commitment to lower emissions from its operations through the reduction of hydrocarbon flaring, venting and fuel gas usage.

A testament to how the company is utilizing solar power in its own facilities can be seen in PETRONAS’ Rooftops and Assets Nationwide (also known as Project SINARAN), an initiative to generate clean energy from solar photovoltaic (PV) systems. To date, more than 100 sites have had their installations completed or are in various stages of planning and execution.

Besides addressing internal needs, PETRONAS leads the way with approximately 1,000 megawatts of solar capacity in operations and under-development projects across India, Dubai and Malaysia. PETRONAS’ notable projects include the 175-megawatt power solarization project, India’s largest commercial and industrial (C&I) open access solar farm in a single location. Meanwhile in Malaysia, PETRONAS has signed the largest solar Power Purchase Agreement (PPA) through its deal with Lotuss Stores (formerly known as Tesco), and has a wide variety of customers, from fabrication yards and research complexes to universities and utility companies.

PETRONAS has also made headway in the production of low-carbon hydrogen by looking into carbon capture, utilization and storage (CCUS) technologies and renewable based hydrogen production pathways. In the near future, it plans to collaborate with key customers and hydropower suppliers to produce zero emission (green) hydrogen.

In addition, PETRONAS is currently looking into solutions for nature-based carbon offsets in order to preserve and restore these natural carbon sinks.

Addressing Climate Concerns

To further complement these efforts, PETRONAS continuously seeks to collaborate with innovators who share a similar vision to combat climate change and meet energy needs while maintaining business sustainability. This is why PETRONAS is a member of the World Business Council for Sustainable Development, which works with other corporations to address greenhouse gas (GHG) emissions and ensure societies move toward a sustainable future.

With its Net Zero Carbon Emissions by 2050 pledge, PETRONAS is progressively looking for solutions and will continue to do what is necessary to achieve its long-term sustainable energy targets.

 

www.petronas.com/sustainability

Malaysia Prepares For Post-Pandemic Resurgence In Medical Tourism

Before the pandemic struck in 2020, Malaysia’s medical tourism industry had been growing year over year, contributing US$400 million to the national economy in 2019. In that year alone, the country welcomed 1.2 million visitors seeking medical services and treatments ranging from fertility, cardiology and oncology to orthopedics, neurology and health screenings.

World-class Healthcare

“Our strength as a key player in the medical tourism industry lies in our easily accessible world-class healthcare services offered at a comparatively affordable price thanks to government-regulated ceiling rates,” says Mohd Daud Mohd Arif, the CEO of MHTC.

MHTC CEO, Mohd Daud Mohd Arif

“Once known as the ‘Hidden Jewel of Asia’ for medical tourism, we have since been recognized as the Destination of the Year for healthcare travel from 2015 to 2017, and most recently in 2020, awarded by the International Medical Travel Journal,” continues Mohd Daud.

“With over 200 private hospitals and many highly qualified physicians and specialists, waiting time for consultations and treatments is minimal. There is no barrier to communication as English is widely spoken and translators can easily be arranged for non-English speakers. For post-treatment options, Malaysia has a myriad of world-class spas and resorts, wellness centers and health-centric tourist attractions on offer, although this may be limited at the present time due to the pandemic,” he adds.

MHTC is an agency under the Ministry of Health tasked with promoting Malaysia as an international healthcare destination. The agency also serves as a one-stop center for all matters related to healthcare travel—ranging from handling of inquiries and business development to safeguarding regulations and facilitating applications.

Forging Resilience

The insigHT virtual conference held in Kuala Lumpur last year.

Malaysia, like most countries around the world, is emerging from the pandemic with a slew of initiatives to kickstart the economy, and “forging industry resilience” is one of the key strategies. In line with this, an upcoming virtual conference by MHTC with a similar theme, named insigHT2021, will be held from November 16 to 18. 

Held annually, the event is a medical travel market intelligence conference that gathers thought leaders and partners from within the country and abroad to collaborate and advance the healthcare travel industry in Malaysia and the region.

The conference will gather some of the top minds from around the world to discuss topics ranging from the future of healthcare and implementation of travel passports to the convergence of hospitality and wellness, and how the industry can work together to achieve common goals.

Besides hospital and healthcare administrators, the conference is expected to attract industry players, professionals and officials from travel, tourism, pharmaceutical, real estate, government and many other sectors.

“New global tourism trends will emerge in 2022, and the future of travel will be impacted by socio-economic shifts, digital innovations and new travel experiences. As professionals in the industry, we must be prepared for what lies ahead and forge resilience,” says Michel Julian, United Nations World Tourism Organization’s program officer and one of the key speakers at the upcoming conference.

Conference participants from around 40 countries will get the chance to exchange ideas and knowledge with peers through private online meetings and roundtable discussions. Participants will also get the opportunity to build their company’s visibility among industry players while brushing up on upcoming trends and post-pandemic recovery strategies. An e-business card download facility will be available to make it easy for participants to expand their networks and connect with their peers.

http://www.mhtc.org.my/insight2021

Beximco LPG: Fueling An Energy Revolution

Beximco’s liquefied petroleum gas (LPG) business has been leveraging technology to accelerate the country’s transition into more sustainable energy systems. The company’s innovative LPG solutions provide a safe, reliable and environment-friendly energy source to meet the everyday needs of the country’s population of more than 160 million. More recently, the company became the first LPG operator in Bangladesh to start exporting LPG to India.

“We are proud that the combination of our downstream value chain and customer insights, together with our unparalleled strength and the expertise of our team, positions us to potentially become the largest downstream oil and gas company in Bangladesh,” says Shayan F. Rahman, Chairman of Beximco LPG. “We’re not just focused on the development of the critical infrastructure related to storage, bottling and distribution. We also have strong emphasis on establishing a differentiated position with our smart LPG solutions to make us the consumers’ preferred provider.”

Safer Fuel For Households

The company was the first to introduce and is the exclusive provider of fiber glass composite LPG cylinders in Bangladesh. These innovative cylinders are explosion proof, light weight, translucent and has a longer lifespan compared to traditional steel cylinders.

Such innovations help developing nations like Bangladesh to switch from using dangerous fuels such as coal and kerosene to LPG for household activities such as cooking. In such markets, individuals often have to physically carry heavy steel LPG cylinders across difficult terrain over long distances, making the task extremely challenging.

Beximco’s next-generation cylinders are very popular among consumers in Bangladesh. The company distributed a record of more than 1 million composite cylinders in the past 12 months. To date, the company has distributed more than 2 million composite cylinders, providing a safe environment to thousands of households and industries including hotels, restaurants and cafes across the country.

The company has also worked to ensure that this safe product is readily available to consumers through a robust distribution network that features home delivery and emphasizes rapid digital evolution through the establishment of an integrated e-commerce platform for convenient and timely purchases.

“Our key competitive advantage has always been to be on the leading edge of the innovation curve, and be able to deliver the greatest possible value and experience to our customers,” says Mrinal Roy, CEO of Beximco LPG. “The Beximco Smart Cylinder™ technology is far more cutting-edge as compared to the traditional steel cylinders.”

As a testament to its success in innovating, Beximco LPG was named “Master of Reinvention” by Bangladesh Brand Forum in 2019 for introducing composite cylinders and making homes safer.

“We are proud that the combination of our downstream value chain and customer insights, together with our unparalleled strength and the expertise of our team, positions us to potentially become the largest downstream oil and gas company in Bangladesh.”

– SHAYAN F. RAHMAN, CHAIRMAN OF BEXIMCO LPG

Cleaner Fuel For Automobiles

Beximco also provides greener energy solutions for automobiles through autogas, a cleaner LPG alternative to petrol. Many developed countries such as Italy, South Korea and Japan have programs for conversion of private cars, taxis and other light duty vehicles to autogas as it is more economical, safer and eco-friendly.

In the long run, LPG is a more cost-effective solution that will allow users to travel a far greater distance compared to conventional compressed natural gas. Vehicles using LPG also produce much lower carbon dioxide emissions compared to traditional fuels. Today, Beximco LPG is licensed to operate over 500 autogas filling stations throughout the country. It also runs facilities that convert petrol cars into autogas-fed vehicles.

Driving Bangladesh’s Development

Home to more than 35 million households, Bangladesh is one of Asia’s fastest growing frontier markets. As the country diversifies its energy sources with development of cleaner fuels such as LPG and liquefied natural gas, Beximco is on a mission to establish a downstream network that ensures the nationwide availability of LPG and encourages more households to use LPG to improve their standard of living and well-being.

In support of its mission, Beximco continues to rapidly expand its LPG storage and bottling plant capacity, while scaling its distribution network and other associated infrastructure. The company also continues to develop effective strategies to accelerate the adoption of the Beximco Smart Cylinder™ by making it more accessible and affordable to all Bangladeshis.

To find out more

www.beximco.com

 

Beximco: Leading The Way To Sustainable Fashion

With climate change seen as the most pressing global challenge over the next decade, more consumers are rewarding businesses that place sustainability at the top of their corporate agenda.

This scrutiny has been especially heavy in the textiles industry, which is traditionally seen as a major contributor to global warming. The sector emits an estimated 1.2 billion tonnes of CO2 equivalent per year, surpassing emissions from airlines and maritime industries combined.

Against this backdrop, Bangladesh’s Beximco has emerged as a global leader in sustainable fashion manufacturing. Founded 26 years ago, the company counts Amazon, Bershka, Marks & Spencer, Michael Kors, Pull & Bear, Target and Zara among its customers.

Amid rising demand for ethically-produced clothes, the company has put sustainability at the heart of its operations by employing a range of advanced manufacturing and supply chain management solutions—from using recycled materials to adopting an on demand manufacturing model—to meet the changing needs of its customers.

With its investments in sustainable and financially viable projects, Beximco is at the forefront of the eco fashion trend. At the same time, it also supports the production of garments that are affordable, durable, comfortable and aesthetically appealing to the customer.

“Every single brand and retailer that we work with has told us that sustainable manufacturing is an absolute necessity going forward,” says Syed Naved Husain, Group Director and CEO of Beximco. “They’ve made it clear that vendors who cannot supply ethical and sustainable clothing will eventually have a very limited role in this industry.”

The Covid-19 pandemic has accelerated the shift towards sustainable products. A survey conducted by McKinsey in April 2020 showed that some 67% of consumers consider the use of sustainable materials to be an important factor when making purchases.

“We have some really exciting and revolutionary plans that will reduce the time, energy and effort to bring products to market and at the same time ensure the welfare of our communities and value chain partners.”

– A. S. F. RAHMAN, GROUP CHAIRMAN OF BEXIMCO

Integrated Value Chain

Beximco’s achievement in sustainable production is also helping Bangladesh shed its image as a low cost manufacturing hub, and leading the country’s progress to integrate into more important global value chains.

“Beximco recognizes that the traditional approach to textile and garment production is no longer tenable,” says A. S. F. Rahman, Group Chairman of Beximco. “Integrating new technologies, embracing workplace innovations, adopting sustainable efficiencies are but a few of the critical changes that must be made to meet the changing demands of customers and markets.”

Today, the Dhaka-based company is considered one of the most prominent eco-friendly fashion manufacturers in the region. “We are proud to have made significant advances and progress in the area of sustainability,” says Rahman, “We have some really exciting and revolutionary plans that will reduce the time, energy and effort to bring products to market and at the same time ensure the welfare of our communities and value chain partners.”

Recycling With Recover

Recycling waste materials to manufacture high quality yarns is at the core of Beximco’s sustainability initiatives. Beximco has partnered with Recover Textile Systems—a Spanish recycling technology company that specialises in turning textile waste into premium fibers—to become the world’s largest collector and recycler of textile waste and a specialized spinner of high quality recycled yarn.

Recover collects and sorts textile waste from around the world to produce new fibers that contain recycled cotton, blended with other recycled materials such as polyester from plastic water bottles. The high percentage of cotton means that such yarn can be used in the production of high-end textiles.

The results are impressive. Recover’s process score is 1 on the Higg Index—the best possible score on the industry standard for measuring environmental sustainability. In comparison, garments made from conventional cotton have a Higg score of around 70, while organic cotton has a score of around 45.

“All products made out of Recover textiles can be recycled at the end of their lives, returning into the system for a new production loop,” says Husain.

Sustainable Washing

Beximco is also pioneering the use of sustainable washing processes that are not only more friendly to the environment, but able to achieve a look and feel that matches consumers’ preferences, while remaining cost competitive.

The conventional washing process for denim fabrics uses large amounts of fresh water, chemicals and energy, as well as produces waste and downstream effluents. To address these issues, Beximco collaborated with leading sustainability tech players such as Jeanologia and Tonello to modify the washing process.

Beximco adopted Jeanologia’s 5.0 laundry technologies such as ozone to replace bleach, lasers to replace chemicals and smart foam to replace water to produce jeans. As a result, the company’s fresh water usage declined to a mere 1 liter per garment from 70 liters using conventional washing methods. That results to savings of as much as 900 million gallons of water per year.

On Demand Manufacturing

In another effort to eliminate waste, Beximco is working with e-commerce giant Amazon to implement an on demand model of manufacturing that’s more economical and sustainable.

While traditional clothing manufacturing is done months in advance of sales, an on demand product is only made after the sale is booked. The product is then shipped in just a few days. As a result, fashion brands will no longer have costly inventories to dispose of at the end of each season.

“In an on demand model, Beximco’s customers do not need to order thousands of something that they may never sell,” says Husain. “There’s no inventory, no fabric wastage and no warehousing.”

With on demand manufacturing raising the pressure to deliver products under a constrained timeline, Beximco has worked to optimize every process to speed up production without sacrificing quality.

Higher Efficiency Cuts Waste

Other sustainability projects Beximco has undertaken are aimed at increasing the company’s productivity and reducing waste by updating its technology and equipment.

For instance, the company upgraded its effluent treatment plant with new technology from the U.S. That’s necessary to protect the environment as effluent treatment prevents the discharge of hazardous substances that can contaminate ground water and cause illnesses and other issues.

Beximco’s commitment to sustainability is also evident at its headquarters in Beximco Industrial Park—a green campus spread across 400 acres (1,600 square kilometers) in Gazipur, an industrial district north of Dhaka. Local residents call the campus the “Lungs of Gazipur” since it’s home to over 100,000 trees and an organic farm. The entire park has been awarded LEED Green certification by the U.S. Green Building Council.

The company’s numerous sustainability efforts are one of the key measures of success that are considered by the company. “The role of sustainability is a fundamental KPI we have defined linked to long term success,” says Rahman. “It should not only be measured from an economic dimension but from a social and environmental one in terms of the well-being of people and the health of our planet.”

 

To find out more

www.beximco.com

Trusting In Wealth Management

Today’s trust business is booming amid technological innovation and an unprecedented intergenerational transfer of wealth. As part of HSBC Global Private Banking, HSBC Trustee has evolved to support client wealth needs as it marks 75 years of operations in Asia in 2021.

Having seen the passage of wealth across multiple generations, HSBC Trustee is well versed with managing family dynamics and well placed to support clients. Its platform has grown to include services such as family governance, family office advisory and philanthropic advisory.

The traditional role of the trustee is taking the legal ownership of assets held in trust and managing them for the beneficiaries. But as asset classes become more complex and families grow and evolve, modern trustees such as HSBC Trustee find that the settlor—the person who sets up the trust—wants and can often have substantial powers at their discretion.

“I think one of the key aspects of a successful trustee is having some of the ‘softer’ skills,” says Brent York, Global Head of Trust and Fiduciary Services at HSBC Global Private Banking. “It’s about understanding the settlors’ wishes as to their legacy. Who do they want to benefit and when? What are the values they want to pass on?”

For Cynthia Lee, Head of Wealth Planning and Advisory for Asia at HSBC Global Private Banking, being a trustee means being more than a financial adviser. “I see the trustee as a confidant for the family,” she says. “When the patriarch or matriarch of a family is looking to find a trustee, our job is to understand the assets that are held in trust. Very often these are the core, could be the business, could be the core investments, could be everything. Most importantly, we understand the family wealth ambition and needs.”

Intergenerational Transfer

HSBC estimates there will be an intergenerational wealth transfer of US$1.9 trillion in Asia over the next decade. “We’re seeing a lot more first to second generation and second to third generation change happening now,” says York. “And that’s going to continue over the next 10 to 15 years in Asia, whereas in Europe and the U.S., they have experienced more succession through multiple generations.”

Family offices in Asia can be quite different from those in Europe or North America for several reasons. “The rise of the family office is a fairly new concept in Asia,” York adds. “A lot of activity is currently focused on investment diversification. We are also seeing rapid wealth creation from the younger entrepreneurs who are moving into a phase of protecting and growing that wealth.”

Technological, environmental, generational and social changes are defining the future of wealth and legacy planning. Many clients recognise that their wealth is not measured purely by its monetary value today and tomorrow, but by the positive change that it can make in the world.

“The succession of wealth is also about the preservation and transfer of the family values, the heritage, the vision to the next generation and these are the key areas which our clients in Asia are talking about,” says Lee. “Identifying and preparing the next generation, preservation of family harmony, uniting the family, continuing the family dynasty are all common themes with our clients. This is how HSBC sets itself apart—our tools and services are focused on both the financial and non-financial aspects of wealth succession.”

Asia is quite diverse, with Japan, Hong Kong, Singapore and Taiwan considered as established wealth markets. “That’s where we have family offices that have been around for 35 years,” Lee says. “The oldest one, in Hong Kong is celebrating 70 years in 2022.” Then there are emerging wealth markets, which Lee describes as “super exciting.” China is the most obvious example, where technology and the new economy have created new entrepreneurs. Countries such as Indonesia and the Philippines have also been part of the tech revolution.

Brent York, Global Head of Trust and Fiduciary Services, HSBC Global Private Banking

Booming Philippine Market

HSBC’s presence in the Philippines dates back 146 years. In 1875, the bank opened an office in Binondo—Manila’s Chinatown—to offer trade finance services to the community’s exporters and merchants. Today, the Southeast Asian country remains a vibrant market for HSBC, despite its financial ups and downs over the past two decades.

“The Philippines is one of the few countries that came out well from the 1997 Asian financial crisis,” says Lee. “Over the past 10 years, it has been a booming domestic market.” She says HSBC Global Private Banking clients come from all walks of life. “It could be a local food and beverage business, it could be retail industry, a biochemical plant, a hotel chain.”

York points out that families are relatively larger in the Philippines. “Often there’s a lot of concerns around the family business and the succession similar to many other Asian countries,” he says. “There might be multiple parties involved and they are also interested in looking at how we can help them with their access to non-Philippine investments and assets.”

Due to Covid-19, HSBC teams have not been able to visit clients in the Philippines—and many other countries—since 2019. “Through the pandemic, clients have had to adapt,” says York. “They’ve had to change business model or retrench, particularly some of those in hospitality and tourism, while others have seen it as an opportunity to invest.”

HSBC had to adjust as well. “Pre-pandemic, a team would arrive in Manila with a packed agenda over three days,” says Lee. “Now it’s two-hour Zoom calls spread over three half days. On the plus side, the team held a meeting with a Philippine family of almost 30 people, via Zoom, even though they were spread across the globe. Some travel is no longer necessary but some engagement by their nature has to be done face to face.”

Cynthia Lee, Head of Wealth Planning and Advisory, Asia, HSBC Global Private Banking

Managing A Faster Pace

HSBC Trustee often finds that younger family members are less conservative than their elders. “The basics of the trust solution is still valid for them to safeguard their wealth,” York observes. “But being able to give them the powers to manage the assets is important.” The younger generation of business leaders is more agile, he notes. “They want things to happen at a faster pace. And that can be a little bit challenging when we need to give advice.”

The bank has adopted new technology and new ways of communicating. “With some of the more dynamic and younger clients, technology is going to become more important because they don’t use emails,” says York. “They communicate with different social media platforms and we have embraced some of that new technology.”

Additional considerations when making investments such as environmental, social and governance (ESG) and social impact investing are another important trend. “Some families might be more ambitious and more liberal, and decide to deploy a higher percentage of their asset allocation altogether into investments which incorporate ESG and social impact outcomes,” says Lee. “They might entrust the younger members of the family to make some of these decisions.”

HSBC Global Private Banking aims to build a long term and trusted relationship with clients. Its wealth planning, philanthropy and family governance service teams have been highly recognised by the industry with awards from Asian Private Banker and Wealth Briefing Asia in 2020 and 2021.

“While we don’t have a magic wand to fix all family challenges, our job is to ensure that within that established framework agreed between us and the family, we’re able to provide all the options that are on the table,” she says. “We are here to help them to preserve their wealth and leave a legacy for the next generations.”

privatebanking.hsbc.com

 


Disclaimers
The information contained in this article has not been reviewed in the light of your individual circumstances and is for information purposes only. It does not purport to provide legal, taxation or other advice and should not be taken as such. No client or other reader should act or refrain from acting on the basis of the content of this article without seeking specific professional advice. Issued by The Hongkong and Shanghai Banking Corporation Limited and HSBC Trustee (Hong Kong) Limited.


 

Petronas: Onwards To A Sustainable Future

As a global energy and solutions partner, sustainability has always been at the forefront of PETRONAS’ agenda. It deeply understands the need to spearhead efforts towards a sustainable future.

PETRONAS’ sustainability journey began more than two decades ago with the integration of environmental, social and governance practices into its business and decision-making.

Driven by a clear agenda, PETRONAS strives to explore new opportunities and drive growth for the business, guided by the four sustainability lenses (see box). PETRONAS declared its aspiration to achieve net zero carbon emissions by 2050 in November 2020.

Cleaner, Renewable and New Energy

PETRONAS’ sustainability journey sees more solutions being introduced as part of the strategies including its foray into the cleaner, renewable and new energy sector. In 2016, PETRONAS introduced its first Floating Liquefied Natural Gas (PFLNG SATU), a game changer which can process gas from offshore fields with depths of up to 200 meters. Their second PFLNG (PFLNG DUA), is the world’s first deep-water floating LNG which is currently operating at water depths up to 1,500 meters. The PFLNG can transport offshore LNG without the need for pipelines, making this a more sustainable way of extracting and processing gas.

Amplus solar farm in Karnataka, India.

The journey continues through the acquisition of Amplus Energy Solutions in 2019, which has now successfully grown its total solar capacity in India and Malaysia to almost 1GW under operation and development.

While in the cleaner energy space, PETRONAS has recently set its focus on producing hydrogen fuel—an efficient energy output that is sustainable, leveraging on technology for the production and transportation of hydrogen.

Behind The Scenes

PETRONAS’ sustainable efforts are also aimed at protecting the environment. For example, it sponsors the Imbak Canyon Conservation Area in Sabah, which advocates research, reforestation, public education and the training of future stewards. Its gravity-based water systems—dubbed “Water for Life”— in Malaysia, Iraq and the Republic of South Sudan supply clean water to over 100,000 residents since 2013.

In the area of education for local communities, more than 31,000 students have benefited from various academic programs and training courses offered by Universiti Teknologi PETRONAS, Institut Teknologi Petroleum PETRONAS, and Akedemi Laut Malaysia.

PFLNG SATU processing gas from the Kebabangan Cluster field in Sabah, Malaysia.

End Goal

PETRONAS recognizes that the key to its sustainability agenda is to continue looking for new ways to strengthen regional cooperation and create the right ecosystem to promote a broader usage of energy from clean and sustainable sources. This is also why PETRONAS joined over 200 forward thinking companies as the newest member of the World Business Council for Sustainable Development in 2020.

As PETRONAS moves towards a sustainable future, it will continue to align its business strategies toward global sustainable energy trends. This will enable PETRONAS to meet the demands of the energy trilemma—defined as security, sustainability and affordability—in ways that will create positive social impact while safeguarding the environment.

www.petronas.com/sustainability